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© CUncdwat SHudio, Washington 

Dr. a. C. Millsi'augh, Administrator-General of the Finances of 







30 New Bridge Street, E.C. 4 




It is my purpose in this book to tell the story of 
the American Financial Mission in Persia since 
the beginning of its work in 1922, and incidentally 
to interpret modern Persia from my own point of 
view. The present volume may be considered, 
not as the completed story of the American Fi- 
nancial Mission in Persia but rather as an intro- 
duction to the story. As I write, I am engaging 
a dozen more Americans to go back with me to 
Persia, to assist the people of that country in 
working out their policies of reform and progress. 
The work of the mission is not yet finished. 

The history of this Oriental people during the 
last three years is to my mind a record of prog- 
ress in the face of extraordinary difiBculties. The 
problem of Persia should, in my opinion, be of 
vital interest to any other people which desires to 
see the stabilization of the world, and the achieve- 
ment everywhere of eflScient government based 
on the will of the governed. 

In outlining the experiences that I have had and 
the information that I have gained, I have en- 
deavored to avoid premature conclusions and 
generalizations from insuflBcient data. If for- 



eigners who have grown more cynical than I, sus- 
pect me of undue optimism, they should have in 
mind that the genuine sympathy and affection 
which I have acquired for the Persian people are 
products of the intimate and none too easy experi- 
ence of one who has conscientiously aimed to keep 
himself open-minded; and my present opinions 
may for that reason alone be in themselves sig- 

If any Persian should feel that I have been un- 
kind or unwise in describing certain of the 
anachronisms, survivals, and weaknesses of his 
people and his country, he should remember that 
frankness is one of the conditions of understand- 
ing, that a problem cannot be solved until its 
elements have been stated, and that it is impossible 
to measure progress already made or estimate thq 
prospects of progress in the future unless one 
sees the points of departure, the distance already 
traveled, and the obstacles and handicaps which 
have been overcome. It would be difficult, for 
example, to appreciate the greatness of Lincoln 
without a knowledge of his. humble origin and his 
homely humanity. 

With regard to nomenclature, I have not been 
entirely consistent or correct. Shortly before my 
departure from Persia, the titles borne by most 
Persian officials were abolished, and I have not 
been able in all cases to learn their present names. 



It has seemed necessary, therefore, to continue to 
give them .in general the names by which they 
were previously known to the world. In the case 
of the Prime Minister who bore the title of ‘ ‘ Sar- 
dar Sepah, ’ ’ I have used the family name which he 
himself now prefers, Beza Khan Pahlevi. 

Other and perhaps more serious inaccuracies 
may be found in this book, but I hope that these 
may be charitably attributed to the fact that the 
American Mission in Persia has been engaged in 
a most absorbing employment, with no time for 
writing or even for the systematic collection of 
data, and that this book has taken form during the 
intervals of a westward sea-voyage on the Medi- 
terranean and the Atlantic and during the spare 
moments of a brief business sojourn in America. 
Almost no information has been available to mo 
except that received incidentally to the doing of 
our work in Persia. This is a personal, not an 
official narrative. Accordingly, I must assume 
full responsibility for its shortcomings. On the 
other hand, it would never have seen the light, 
even as a by-product of our work, if I had not re- 
ceived the loyal and able cooperation of my 
associates of the American Mission, and if the 
mission had not been permitted by the officials of 
the Persian Government, by the deputies of the 
Parliament, and by the Persian people to make 
its investigations and do its work. Prom the 


nature of the case, those to whom I am indebted 
for the information that I have used and for the 
points of view that I have expressed are too 
numerous to mention, and I am compelled to con- 
tent myself with a general acknowledgment. I 
am, however, under special obligations to my wife 
for her unfailing encouragement, to Professor A. 
V. Williams Jackson, of Columbia University, to 
Thomas Pearson, and to Mr. W. Morgan Shuster, 
President of the Century Co., — ^who himself occu- 
pies a niche in Persia’s Hall of Fame — ^for his 
assistance and suggestions. 

I wish to make it perfectly clear that no one in 
Persia and not a single official of the Persian or 
any other government has seen the manuscript of 
this book or has been consulted regarding its con- 
tents or conclusions. The responsibility for it is 
wholly mine. 



I Introduction 3 

II The American Mission Takes Up Its Task 27 

III How We Found the Finances .... 52 

IV Persian Psychology 84 

V Persian Politics 109 

VI Using Strange Tools 150 

VII Getting Down To Work 172 

VIII Gathering Clouds 199 

IX Fair Weather 219 

X Agriculture, Manufacturing, Transpor- 
tation, AND Commerce 247 

XI Natural Resources and Other Assets . 287 

XII Conclusion 308 

Index 319 




Dr. a. C. Millspaugh, Administrator-General op 

THE Finances op Persia .... Frontispiece 

Panoramic View op Teheran 16 

View of the Gardens op Golistan, Looking To- 
ward THE Entrance op the Shah’s Palace . 33 

Constructing the First High-Power Government 
WireliEss Station in Persia; Near Teheran 64 

Camel Caravan 81 

A Train op the Railway prom Teheran To the 
Shrine op Shah Abdul Azun 81 

Keza Khan Pahlevi, Prime Minister, Minister op 

War, and Commander-in-Chiep op the Army 112 

His Imperial Majesty, Ahmad, Shah op Persia . 129 

New Gate op Army Drilling-Grounds at Teheran 144 

His Imperial Highness, the Valiahd, Crown 
Prince op Persia 161 

Americans in ‘‘Djobbeh” and ‘‘Kola” Apter the 
Opening op the Majless, January 29, 1924. 
From Lept to Right, Mr. McCaskey, Dr. 
Millspaugh, and Colonel MacCormack . . 192 

Agha Seyed Hassan Modarres, Leading Civil 
Deputy 209 





Prime Minister at Demonstration op Persian 

Army Airplanes 224 

Cutting Rice in the Province op Guilan . . . 224 

Army Barracks at Teheran 241 

School for Military Cadets at Teheran . . . 241 

Interior Hall op Dr. Millspaugh ’s Summer 

Home at Tajrish . . * 256 

Garden op Dr. Millspaugh ’s Summer Home at 
Tajrish 256 

Mirza Hassan Khan Pirnia (Formerly Muchir 
Ed Dowleh), Leading Independent Deputy, 
Prime Minister, Junb-October, 1923 . . . 273 

Mostowpi Ol Memalek, Influential Indepen- 
dent Deputy, Prime Minister, Pebruary- 

June, 1923 273 

Mirza Hossein Khan Pirnia (Formerly Motamen 

Ol Molk), President op the Majless . .273 

Sardar Moazzam Kiiorassani, Minister op Public 
Works 273 

T ADA YON, Leader op the Majority in the Majless, 

AND Chairman op the Budget Commission . 304 

Firouz Mirza, Deputy op Kermanshah and a Ma- 
jority Leader in 1922-23 304 

Arbab Khaikrosrow Shahrokh, Progressive Par- 
see Deputy and Business Manager op the 
Majless 304 

Mirza Mohamed Ali Khan Foroughi (Formerly 

ZoKA Ol Molk), Minister op Finance . . 304 





W HEN the American Financial Mission 
arrived in Persia, in the fall of 1922, 
we were welcomed by one of the news- 
papers of Teheran as follows : 

You are the last doctor called to the death-bed of a 
sick person. If you fail, the patient will die. If you 
succeed, the patient will live. I do not applaud your 
arrival. I shall applaud, if you succeed. 

His Imperial Majesty the Shah, at the audience 
which he granted us in Paris on our way to Persia 
and during subsequent conversations in Teheran, 
expressed a similar sentiment, and added that he 
considered the American Mission “the last hope 
of Persia.'^ Many other Persians echoed these 

In spite of these symptoms of mental depres- 
sion, the patient, as I look back after two and 



one half years of intimate observation, appears 
to me to have enjoyed a fair expectation of life. 
Three thousand years of existence supplies in it- 
self presumptive evidence of exceptional vitality 
and recuperative power. 

Persia, according to the diagnosis of the “last 
doctor, ’ ’ was a case of arrested development with 
complications. The complications were many and 
some of them may have been serious ; but they did 
not indicate any necessity for a major operation, 
for an international strait-jacket, for diplomatic 
massage or manhandling, or even for much ad- 
vice. Persia seemed likely, not merely to live but 
to grow healthy and vigorous if left alone on a 
simple, nourishing financial diet with active eco- 
nomic exercise in the open door. 

Historically, Persia was a world empire long 
before Rome extended its power beyond Italy; 
and the Persians were one of the few peoples' 
who defied and defeated the Roman armies. 
Cyrus, Darius, and Xerxes are familiar names to 
any one who has passed the first year of high 
school. Unfortunately for a correct understand- 
ing of the country, ancient Persia has been too 
commonly represented in school texts as a bar- 
barian threat to the Western civilization which 
was then budding at Athens. Little attention has 
been given to the contributions of Persia itself 
to civilization. Persia either created or ap- 



propriated and improved much of the best in the 
science and art of the ancient world. The con- 
tinuous existence of Persia as a nation, from re- 
mote antiquity to the present time, the archi- 
tectural grandeur exemplified by the ruins of 
Susa and Persepolis and by many other monu- 
ments and antiquities, the poetry of Firdusi, 
Sadi, and Hafez, to say nothing of such minor 
poets as Omar Khayyam, the persistence through 
the centuries of beautiful and artistic work in 
textiles, silver, brass, and pottery, the present 
progressive movement linked with the mainte- 
nance of nationality — all these things and many 
others illustrate the extraordinary vitality and 
power of recuperation possessed by the Persian 

Standing between the East and the West, in- 
vaded by East and West and invading both, the 
Persians have always had a rare capacity for 
drawing on the special gifts of other peoples with- 
out losing their own characteristics and integrity. 

Persia’s problem — ^her case of arrested develop- 
ment — gets its first explanation in geography and 
its second in history. 

With the exception of the Caspian provinces 
and the shores of the Persian Gulf, Persia is a 
table-land, buttressed and crossed by mountain 
ranges. Save for the Karun, in the extreme 
southwest, there are no navigable rivers in 



Persia. The meager streams of the plateau flow 
toward the interior and lose themselves in salt- 
deserts. Moreover, the topographical conditions 
which present obstacles to commerce are no 
doubt important factors in determining the cli- 
mate of Persia. The rainfall between the Cas- 
pian coast and the Elburz Mountains is too abun- 
dant, but in the interior it rarely exceeds Six 
inches. As a result, while dry farming is possi- 
ble in a few regions, the agriculture of Persia has 
depended chiefly on artificial irrigation ; and, 
although agriculture has remained the chief in- 
dustry of the country, it has, due to transporta- 
tion difficulties, played little part in commerce. 
With an area of 628,000 square miles, — greater 
than that of France and Italy, — ^Persia has a 
population which, in the absence of a recent 
census, may be estimated at about twelve mil- 

Persia in the time of Cyrus and Darius was a 
world empire characterized by splendid power and 
creative civilization. Darius’s post-road was a 
transportation wonder of the ancient world ; even 
now one can see from the Hamadan-Kazvin- 
Teheran highway the huge earth mounds said to 
have been thrown up by Shah Abbass in the six- 
teenth century to serve as a chain of communica- 
tion by signals across the country; imbelievable 
tales are told of the speed of Persian couriers. 



Persia, nevertheless, has never been, either ex- 
ternally or internally, a commercial country. 
The development of a true commerce has lain to 
the west, with Phoenicia, Athens, Venice, the 
Hanse towns, Holland, and England. 

The medieval trade routes to India and China 
passed down the Eed Sea from Alexandria; or 
overland from Antioch or Damascus, through 
Bagdad and down the Euphrates and the Persian 
Gulf ; or from Trebizond on the Black Sea, along 
the south end of the Caspian, through Bokhara 
and Samarkand in present-day Russian Tur- 
kestan. The ships and caravans of the time 
naturally took the lines of least resistance; they 
merely skirted Persia; they did not originate in 
the country or pass through it except at the bor- 
ders. Moreover, the discovery of the westward 
route to India and China did not seem likely, from 
the economic point of view, to improve the situa- 
tion of Persia. In course of time, however, the 
British Empire, assuming the governance of 
India, became a neighbor of Persia, and in the 
second half of the nineteenth century the tide of 
Russian expansion reached the borders of Iran. 
During this pregnant period, Persia not only 
came into territorial contact with two Western 
powers, but she began to sense the significance of 
the recently acquired world positions of the 
United States and Germany. During this period, 



Persia became to other countries an object of 
intensive economic interest. 

The tide of commerce had rolled back on Persia. 
Modern industrial civilization, with its potent 
political accessories, had found Persia in its path. 
West and East had met again, but not as in the 
time of Cyrus and Xerxes, of Alexander, and of 
Crassus. Persia was no longer an empire amdng 
empires. She had now become a buffer state and 
one of the world’s last and most extraordinary 

In 1872, British telegraph lines crossed Persia ; 
in the following year, the Shah for the first time 
visited Europe; in 1876, a concession for the 
Caspian fisheries was given to a Russian subject; 
in 1888, the first railway in Persia, a short line 
from Teheran to the shrine of Shah Abdul Azim,- 
was constructed ; in the following year, a conces- 
' sion was granted to British interests for a statb 
bank, including exclusive mineral rights ; in 1890, 
the British obtained a tobacco concession. From 
that year, Persia became increasingly more im- 
portant in the economic policies of foreign 
powers; and for the last thirty-five years the 
question of transportation in the Middle East has 
repeatedly arisen in international negotiations, as 
well as in Persia’s plans for its own economic de- 
velopment. The imminence of the problem to 
Persia, as well as its international significance, 



was shown at the end of the nineteenth century, 
when the Turkish links of the railroad from Berlin 
to the Persian Gulf began to become actualities. 
Later, the British obtained railroad options in the 
south of Persia ; and the Russians, highway con- 
cessions in the north. It became clear that trans- 
portation offered the key to Persia’s economic 

Political dangers which may have arisen in the 
past from geographical location, have been partly 
obviated by Persia’s extraordinary topography. 
The country is walled with rock as its cities and 
villages are with mud. Sailing up the Persian 
Gulf, one sees on his right the coastal edge of 
the plateau of Iran rising abruptly and unbroken, 
an impenetrable gray rampart. A trip in an 
automobile through the passes of the southern, 
northern, or western ranges of Persia is an ex- 
perience which if its interest and impressiveness 
were fully appreciated would alone serve to at- 
tract many more tourists than now visit Persia. 

Entering Persia from the south, the west, or the 
north, one is compelled to climb passes some of 
which attain an elevation of over ten thousand 
feet. The interior of the country is an enormous 
saucer-like table-land with elevations of from two 
thousand to eight thousand feet, rimmed with 
motmtains which are among the most magnificent 
in the world. The king of them all, Demavend, 



seems a worthy rival of Fujiyama in grandeur, 
with the point of its snow-capped cone rising 
twenty thousand feet above sea-level. Viewed at 
sunset from Teheran, which lies about sixty miles 
to the southwest, the colors of its cone changing 
from white to gold, then to purple, and finally to 
gray as the sun sinks in the west, Demavend, 
always impressive, becomes for a few moments 
each day as glorious as Persia’s western sky 

In an age of commerce and economic penetra- 
tion, merely to “bound” a country does not 
describe its real relation to contiguous countries. 
The Caspian Sea, lying between Russia and 
Persia, is not a true geographical frontier. It is 
not a barrier ; it is an exposure, an invitation ; it 
is an obvious and easy path between Russian and 
Persian ports, and it is not surprising that the 
northern neighbor should have gained a position of 
predominance in the commerce of the whole of the 
marvelously rich territory between the Elburz 
Mountains and the sea. Across the frontier of 
Azerbaidjan, a railroad extends south from Tiflis 
to Tabriz ; and east of the Caspian, in Turkestan, 
another Russian railroad almost touches the 
Persian province of Khorassan at Askabad. An 
Ijidian railroad terminates a few miles within the 
Persian frontier at Duzdab, and another British- 
controlled line leads north through Iraq from 



Basrah on the Persian Gulf, through Bagdad to 
Khanikin, a few miles from Kasr-Shirin, the 
Persian terminus of the west-east road to 
Teheran. Draw a straight line from Khanikin 
to Duzdab and it roughly coincides with the line 
fixed in the British-Eussian Agreement of 1907 as 
the southern boundary of the Eussian sphere of 

Eussia and Persia, therefore, have in common 
two land frontiers, one approached and the other 
penetrated by a railroad, with the Caspian Sea 
between. The British and Persian empires like- 
wise share two land frontiers, one approached and 
the other penetrated by a railroad, with the 
Arabian Sea and the Persian Gulf between. 
Along the eastern frontier, Afghanistan, and 
on the western, Turkey, share with Persia the 
precarious distinction of keeping apart two great 

I have mentioned the capacity possessed by the 
Persian people for drawing on the special gifts 
of other peoples without losing their own char- 
acteristics and integrity. 

Persia has never, like Far-Eastern countries, 
barred her doors to foreigners or followed a de- 
liberate policy of isolation. On the one hand, — 
like England, for example, — she has been, in the 
course of her long existence in a transit region of 
the world, repeatedly captured and nourished by 



alien invaders ; on the other hand, she has, perhaps 
more than any other country, invited foreigners 
to give her expert assistance, not as a confession 
of political subordination or of incapacity but 
rather in the spirit that an American university 
listens to the lectures of a foreign professor, or 
an American municipality, desirous of non- 
political and expert administration, appoints a 
city manager, budget director, or police chief 
from another part of the country. 

In 1900, the Customs Administration of Persia 
was placed in charge of foreign officials; and in 
1903, Monsieur Naus, Belgian Director of Cus- 
toms, was for a short time in general charge of 
the finances. In 1907, Monsieur Bizot, a French 
oflScial, was appointed Financial Adviser and re- 
mained in Persia two years without powers and 
without noticeable result. In 1911, Mr. W. Mor- 
gan Shuster, with a group of American assistants, 
came to Persia on the invitation of the Imperial 
Government, to reorganize and administer the 
finances of the country. Within a month after his 
arrival, the Majless passed a law conferring on 
him comprehensive powers as Treasurer-General ; 
he was supported by a majority of the Majless and 
by a large body of public opinion; and, since the 
unfortunate termination of his work by reason of 
international complications, the Persians have 
never ceased to respect him as an incarnation of 



their own highest aspirations. After the depar- 
ture of Shuster, Monsieur Mornard, the Belgian 
Director of Customs, became Treasurer-General, 
but his tenure was short and he did not bring 
about any fundamental improvement in the 
financial situation. After the World War, a 
British Treasury official, Mr. Armitage-Smith, 
served for some months as Financial Adviser to 
the Persian Government. 

When I arrived in Persia, I found Belgians ad- 
ministering the Customs and Posts Administra- 
tions, Swedes directing the police department, 
French doctors in charge of the Pasteur Institute, 
and French professors installed in the Ministry of 
Justice, codifying the laws and teaching in the law 
school. The Swedes were later dismissed; but 
steps were taken to employ a forest expert from 
Germany and an expert in tea-culture from the 

While the appointment of foreign advisers and 
administrators in Persia may not always have 
been calculated and freely willed by the Persian 
Government or the Persian people (foreign eco- 
nomic interests and pressure were doubtless 
strong factors in this connection), nevertheless it 
is clear that Persia for a quarter of a century has 
held in its administrations with more or less con- 
sistency the signs and seeds of progress. 

It is not our concern to balance the credits and 



debits of the past. Progress in Persia is not 
wholly imported ; it is not a wholly exotic 
product fed by imitativeness and passing whims. 
Persia has of course adopted, and has received 
without any volition on her part many of the 
obvious material aspects of Western civilization; 
but it is more significant that she has learned and 
applied so quickly and consistently certain of the 
essential principles of our modern organized so- 
ciety. A most noteworthy thing to me is that the 
Persian Government and the thinking classes of 
the Persian people have comprehended more 
clearly than foreigners the theory of participation 
by foreigners in Persian administrations. 

Foreign administration in Persia has not been 
to the Persians in any sense a stultifying sur- 
render, and apparently it has not discouraged— ^ 
perhaps it has even encouraged — the existence 
and growth of nationalistic spirit and political 
skill among the Persian people. The fact is, 
Persia is a weak country and in many respects an 
immature country. The experience of Persians 
in constitutional government and administration 
dates only from 1906. For the Persians, more- 
over, the task of completing and consolidating 
their political revolution is complicated by the 
coincidence of a comprehensive transition from 
economic and social conditions which in many 
respects are primitive or medieval. The inevita- 



bility of this transition, they cannot escape, if 
they would. With respect to countries like 
Persia, the modern industrial world — ^largely ig- 
norant, itself, of the forces that drive it and of 
the reasons for its aggressiveness — ^lays down a 
minimum standard of efficiency as the price of 
independent existence. 

Persia has long felt this pressure and has de- 
sired to meet the demands of the modem world. 
Moreover, there has been a noticeable desire 
among thinking Persians for the more varied and 
stimulating life that results from or accompanies 
economic development. Persians have been 
thinking somewhat in terms of welfare. 

They have seen, however, that economics must 
precede welfare and finance must precede eco- 
nomics. Although politically engrossed, they 
have seen that finance and politics are as un- 
congenial as the proverbial lion and lamb, and 
that, to change the metaphor, an untrained polit- 
ical bull plays quick havoc in the financial china- 

A financial administration — or, for that matter, 
any other technical administration — is, under the 
best of conditions, a difficult piece of machinery 
for a representative government to operate. It 
is naturally still more difficult when represent- 
ative govermnent is in the first stages of develop- 
ment. The Persians themselves are the first to 



confess frankly their administrative and financial 
difficulties. In the absence of an enlightened and 
effective public opinion in support of honest, effi- 
cient, and law-observing administration, the sys- 
tem of responsible cabinet government which ex- 
ists in Persia captured and corrupted the financial 
administration. There is, therefore, a settled 
conviction among enlightened Persians that Per- 
sian finances must be kept free of politics and 
personal influence, and accordingly must be man- 
aged, for some time to come, by foreigners. 

The inability of Persian politicians at the pres- 
ent time to manage Persian finances should not 
be construed to indicate any inherent incurable 
incapacity for self-government or even for techni- 
cal administration. That the Persians should 
recognize clearly their situation and needs ^.nd 
should on their own initiative invite foreign ex- 
pert assistance, as they have repeatedly donie in 
recent years, seems to me evidence, rather, of 
their good sense and of their genuine desire for 
the improvement of their administrations. As a 
matter of fact, other countries have at one time or 
another and in one way or another received in- 
struction from foreigners. In our own Revolu- 
tion, we did not scorn to be drilled by French and 
Germans ; and in the World War we quickened our 
preparation by learning from the French and the 
British. Many American cities have adopted the 



city-manager system of government, whicli is a 
recognition of the fact that one of the simplest 
and surest means of making administration 
efficient and economical is to call in a technically 
qualified outsider, give him an adequate salary, 
secure him in his position for a reasonable time, 
and equip him with adequate powers. The fact 
that the Government of Afghanistan has recently 
asked the Persian Government for certain admin- 
istrative advisers indicates that the theory of rel- 
ativity has some application in governmental mat- 
ters. In any event, it would lead to a better un- 
derstanding among nations and to a speedier im- 
provement of their internal administrations, if 
the strong nations as well as the weak should more 
frequently exchange officials and specialists. 

The Persians, furthermore, are most insistent 
that their foreign employees should confine them- • 
selves to their administrative tasks and should 
not mix in political or religious matters. A stipu- 
lation to this effect is written in the contracts of 
all foreign officials. With regard to the admin- 
istrative work of foreigners, the Persians are 
highly critical and exacting. 

In 1921, the Persian Government, then headed 
by Muchir ed Dowleh, — ^a patriotic liberal who 
during his public career in Persia has won gen- 
eral respect for his honesty, dignity, sound judg- 
ment, and statesmanlike aims, — ^formulated the 



main headings of an economic policy which in- 
cluded the employment of American advisers for 
the Ministries of Finance and Public Works and 
the Municipality of Teheran, the granting of a 
petroleum concession in the northern provinces to 
an American-controlled company, the attracting 
of American capital to other Persian investments, 
and the flotation of a loan in America. 

The Persians looked upon America as a rich 
and powerful country whose government and peo- 
ple had already shown their humanitarian tend- 
encies and their friendliness and sympathy for 
the Persian people. They did not doubt the disin- 
terestedness of America ; and entertained no fear 
that Americans, under cover of concessions or 
loans, would interfere in the politics of an Eastern 
country or attempt to dominate its government. 
The Persian Government, in a communication to 
the Department of State, had pledged itself to tlie 
principle of the open door; and the Persians no 
doubt felt that the presence of Americans and 
American capital in Persia would contribute to 
the creation of conditions under which the open 
door would become an actuality and the danger of 
spheres of influence or a partition of the country 
would be definitely past. The ‘ ‘ American policy ’ ’ 
of the Persian Government appeared to be based, 
therefore, on a strong desire to insure in a practi- 
cal way the independence and integrity of Persia 



through economic and financial cooperation with 
a nation whose interests in the country would be 
likely to coincide with those of the Persian people. 

The desires of the Persian Government were 
conveyed by its minister at Washington, Mirza 
Hossein Khan Alai, Persia’s ablest diplomat, 
whose colorful personality, quick command of 
English, indefatigable activity, devotion to his 
country, and touching confidence in Americans, 
quickly won for him a large circle of American 
friends. Mr. Alai arrived in the fall of 1921, and 
immediately began his representations at the De- 
partment of State and his negotiations with 
American companies. As Economic Adviser of 
the department, it was my privilege to have fre- 
quent conferences with him, and the acquaintance 
thus established with him and with Persian ques- 
tions had, doubtless, much to do with my selection 
as Administrator-General of the Finances of 

In July, 1921, the Department of State, after 
prolonged consideration, suggested my name as a 
person with whom the Persian Legation might 
wish to communicate in regard to the appointment 
of a Financial Adviser. In suggesting my name, 
the department made it perfectly clear that I 
would undertake my work in Persia in a purely 
private capacity, and that all connection with the 
department would cease immediately upon my en- 



tering the employment of the Persian Govern- 
ment. It was made clear, further, that the Ameri- 
can Government assumed no responsibility for 
any action that I might take as an oflScial in the 
employment of the Persian Government. 

The attitude of the American Government in 
this respect has been understood perfectly by the 
various members of the financial mission and by 
Persian officials ; we have conducted ourselves ac- 
cordingly ; and I am confident that there will never 
be any disposition on the part of the Persian or 
any other government to hold the Government of 
the United States responsible for the acts of 
Americans employed in Persian administrations. 
With regard to their relationship to their own 
governments, the position of other foreigners em- 
ployed in Persia appears to be somewhat dif- 
ferent. The Belgians employed in the Customs 
Administration, for example, are career officials 
of the Belgian Customs Administration assigned 
to Persia by the Belgian Government. 

My contract with the Persian Government was 
signed by Mr. Alai and myself on August 14, 1922. 
In the contract I was given general charge of the 
financial administration and the preparation of 
the government budget. It was agreed by the 
Persian Government that it would neither grant 
any commercial or industrial concession nor take 
any decision on a financial question without prior 



consultation with me. Explicit powers assigned 
to me involved effective control over the per- 
sonnel of the financial administration, over ex- 
penditures, and over the creation of financial ob- 

Between the signing of the contract and our 
departure on September 30, 1922, the Persian 
Legation engaged on my recommendation a num- 
ber of capable assistants to accompany me. 
The municipal adviser. Dr. Ryan, and his assis- 
tants who were engaged later, did not form a part 
of the financial mission. My American colleagues 
in Persia thus far have been Dr. E. L. Bogart, Mr. 
Frank H. Gore, Mr. Charles I. McCaskey, Col. D. 
W. MacCormack, Mr. Edmund H. Jones, Maj. 
Melvin Hall, Mr. T. C. Mitchell, Mr. C. C. Early, 
Capt. Thomas Pearson, Mr. James H. Flannagan, 
and Mr. John A. Dunaway. 

Although the Persian Government during its 
long history has taken numerous partial censuses 
for fiscal and military purposes and has not been 
indifferent to the value of statistics, I found that 
the publication of well-planned financial reports 
and accounts had been started by Mornard and 
had ceased with his passing, although the customs 
and postal statistics were still being published an- 
nually by the Belgian officials in the administra- 
tions concerned. As a result, we were unable to 
find anything in the United States except the most 



general and inaccurate figures of Persian rev- 
enues and expenditures. We were not informed 
at all concerning the amount of the floating debt, 
and were given nothing but startling guesses at 
the sum of the salaries of government employees 
in arrears. We knew that the deficit must be 
large; and apparently, so far as we could learn, 
the then Persian minister of finance knew no 

There are no American press correspondents in 
Persia, and as a result the American newspapers 
and their readers in general are apparently almost 
as ignorant of real conditions there as they are of 
conditions in the sacred city of Lhasa. Due 
largely, I suppose, to the remoteness of the coun- 
try, only its sensational occurrences are reported 
in American newspapers, — for example the niur- 
der of Vice-Consul Imbrie, the earthquake;, at 
. Torbat, the Parisian sojourns of the Shah, the 
movement to establish a republic, and the late un- 
pleasantness between the Prime Minister and the 
Sheikh of Mohammerah, events all of which are 
important and some tragic, but which, torn from 
related events and surrounding conditions, give 
an utterly misleading conception of the situation 
in Persia. 

There are several books which, although not up 
to date, present an informing description of sig- 
nificant historical events, conditions, and char- 



acteristics in Persia. Of these, I recall with par- 
ticular appreciation Dr. Browne’s “Persian Rev- 
olution” and “A Year Among the Persians”; 
Professor Jackson’s “Persia, Past and Present”; 
Shuster’s “Strangling of Persia”; Balfour’s 
“Recent Happenings in Persia”; Sykes’s “His- 
tory of Persia”; and the inimitable “Haji 
Baba,” which, although fiction, is truer than 
much that purports to be fact. 

The conversations that we had, in America and 
on our way to Teheran, with those who had visited 
Persia, as well as the articles in the foreign 
press with respect to our mission, were eminently 
useful, but were not calculated to increase our 
optimism. The warnings that we received were 
kept in mind and served to temper our enthusiasm 
and keep us on our guard before experience had 
taught us its lessons. The Persian correspond- 
ent of the “Near East” said in its issue of Octo- 
ber 19, 1922 : 

The American Financial Mission, under the leadership 
of Mr. Milspaul [sic] will arrive in this country shortly. 
Skeptics give him three months to get to know his work, 
three months in getting his work in motion, three months 
in collecting his salary before leaving Persia in despair. 

In Paris, we were received by the Shah in his 
apartment at the Hotel Meurice. After the pres- 
entation and some affable words of welcome from 



his Imperial Majesty, I made a brief prepared 
speech which was answered by the Shah with ex- 
pressions of friendliness and assurances of sup- 
port. After the audience, in a private conversa- 
tion, he again expressed his good-will. Nassir ol 
Molk, who was regent in the time of Shuster, a 
wise, experienced old man, was present at the in- 
terview and acted as interpreter. 

The route that we took to Persia, the only prac- 
ticable one at that time, was by way of the Ked 
Sea, Bombay, and the Persian Gulf to Basra, 
thence by rail via Bagdad to Quaratu on the Per- 
sian Iraq frontier, and thence by automobile to 
Teheran through Kermanshah, Hamadan, and 
Kazvin. The trip took six weeks. At the present 
time Teheran may be reached in three weeks from 
New York, either through Russia or by way of 
Beirut, Syria, across the desert by automobile 
transport to Bagdad, thence by train or auto- 
mobile to Khanikin on the Persian-Iraq frontier, 
and on to Teheran by automobile. 

Traveling by automobile in the East is not un- 
comfortable or expensive; the roads, when not 
the smooth hard floor of the desert, are being con- 
stantly improved; and rest-houses and little ho- 
tels are springing up along the way. 

We were met in Bagdad by a young Persian 
named Mirza Mahmoud Khan Nassery, who had 
been educated in England and who spoke English 



perfectly. He had been sent by the Minister of 
Finance with a ferarsk (servant) of the ministry 
named Ismail Khan, to arrange for our transpor- 
tation and comfort during the remaining portion 
of the journey. They performed their tasks 
most efficiently. 

Thoroughly pessimistic concerning the char- 
acter of Persian officials and the condition of the 
finances, Nassery was nevertheless exceptionally 
intelligent and he was able on the way to give me 
much valuable information concerning the tax sys- 
tem of Persia. He was later appointed an assist- 
ant in the Direct Tax Administration and proved 
to be one of our most industrious and valuable 
Persian employees. 

We were hospitably received by local officials 
and other prominent Persians at the principal 
towns on the road to Teheran ; we had our fill of 
crisp bread, pilow, dookh, mast, and other appe- 
tizing Persian dishes ; we tasted the rare delicious- 
ness of Persian melons ; we pushed past tribesmen 
emigrating with their flocks of sheep ; near Ker- 
manshah we saw the ancient stone inscriptions of 
Taghi Bostan and Bisitoon; near Hamadan we 
saw hot mineral springs bubbling up near the 
road ; in spite of the chilly November air, we were 
impressed by the matchless view of mountains 
and valleys from the high passes; we met with 
a gust of rain near Kazvin, a sign of luck said the 



Persians; we passed caravans of camels, pack- 
mules, pack-horses, two-wheel wagons pulled by 
one horse and four-wheel wagons pulled by two 
or four horses, groups of donkeys with heavy 
burdens and tinkling bells, some automobiles and 
motor-trucks indicating the advent of fast 
machine transport ; and in the evening of Novem- 
ber 18, 1922, we entered Teheran to find Mokhber 
ed Dowleh Park, one of the largest in Teheran, 
rented for us, a house almost completely fur- 
nished, servants salaaming on the steps, and a 
warm dinner ready to eat and faultlessly served. 




D ue to the difficulty of obtaining berths 
on the east-bound steamer from Mar- 
seilles, the American Mission — consist- 
ing, with its families, of seventeen adults, a boy of 
seven, and a six-months-old baby — ^had separated 
at Paris into two parties. Mr. Pearson, my spe- 
cial assistant, Mr. Flannagan, my secretary, and 
I took the first available P. and 0. boat to Bom- 
bay and the remainder of the party followed a 
week later. At Bagdad, Mr. Pearson was taken 
with malaria, and as a result, Mr. Flannagan and 
I, with Nassery and Ismail, went on to Teheran 
without him. 

On the morning after our arrival, we took a 
look about Mokhber ed Dowleh Park. A rec- 
tangle of about thirty acres, it is one of the largest 
and most beautiful gardens in Teheran, being sec- 
ond in size to the famous Attabek Park, where 
Shuster had been housed and which is now oc- 
cupied by the Soviet Legation. Our residence is 
perhaps a quarter of a mile outside the city wall, 



and in this location we have enjoyed more pri- 
vacy than would have been our lot within the 

The same residence had been placed at the dis- 
posal of Mr. Armitage-Smith ; and Djavad Khan, 
the English-speaking head servant who had been 
engaged for my service, had acted in a similar 
capacity for the British Financial Adviser and for 
some of the foreign legations. 

In Mokhber ed Dowleh Park, two houses had 
been constructed, an enormous one which had been 
used as the anderun or family residence and a 
smaller house which had been used as the hirun 
or place of reception and business for the Persian 
master. The smaller house had been furnished 
by the Government for the use of myself, Mr. 
Pearson, and Mr. Flannagan; the larger house 
was intended as the residence of several other 
members of the mission. Built in the French 
style, with ornate decorations, impressive en- 
trances, large windows, spacious rooms, and high 
ceilings, the houses leave little to be desired, so 
far as appearance is concerned. 

A Persian garden, such as Mokhber ed Dowleh 
Park, is a striking contrast to the sun-baked 
streets or bare fields outside. Within the walls of 
the garden, art and nature join in creating 
trees, shrubbery, flower beds, walks, streams, 
waterfalls, pools, and fountains that not merely 



delight the eye but become as much a part of the 
conception of home as the rooms and furniture of 
the house. Water is the life and the most pre- 
cious adornment of a Persian garden ; and in our 
park were two large, deep, clear pools stocked 
with goldfish, and three smaller pools with foun- 
tains in their centers. Lawns are rare in Persia 
and there was none in our garden, partly perhaps 
because of the shade cast by the thickly planted 
poplars, sycamores, and shrubbery. 

In the spring after our arrival, we built a tennis- 
court and cleaned the largest pool for swimming ; 
and, aside from other forms of recreation, we have 
taken pleasure in walking about the garden and, 
in the cool of the day, along the roads outside. 

In the smaller house, we have five large rooms 
and three halls, each with a fireplace. The 
kitchen, servants’ quarters, and store-rooms are 
in the basement, where the rooms follow exactly 
the plan of the floor above. The rooms are diflS- 
cult to heat and to furnish attractively and com- 
fortably according to American taste. We have 
set up iron stoves in some of the rooms, but the 
reception room, living-room, and dining-room are 
heated by fireplaces burning wood or Persian 
coal. Electricity, produced by a steam-power 
plant in the city, is available for lighting many of 
the buildings of Teheran, but most of the private 
residences, including those of Mokhber ed Dowleh 



Park, are lighted by kerosene lamps. Water is 
heated in a samovar and baths are brought to the 
rooms, in large circular tubs. It is surprising 
how little one misses in Persia the so-called mod- 
ern conveniences of American houses. The fires, 
lights, and baths are attended to by the servants, 
good furniture is made in Teheran to order, and, 
on the whole, a permanent resident there can live 
as comfortably as in the West. 

In addition to Djavad Khan, we found several 
other servants at the house ; but these were soon 
reduced in number to four : two house servants, a 
cook, and a cook’s boy, to whom were added, after 
Mrs. Millspaugh’s arrival, a baji or woman- 
servant. The Persian servants are as a rule 
highly efficient, and, due to the economic condi- 
tions of the country, there is no lack of them. 
They are attentive to details, respectful, and faith- , 
ful -to their employers. Persian servants will 
rarely steal money or valuables, but they have 
their own commercial ethics according to which 
commissions on purchases for the house are con- 
sidered by them a legitimate supplement to their 

On the day following our arrival in Teheran, I 
called at the American Legation and on Fahim ol 
Molk, the Minister of Finance, the latter receiving 
me with marked cordiality and evidence of relief. 
He introduced me in his house to the editor of 



the newspaper “Iran,” but advised me afterward 
to have nothing to do with Persian newspapers. 
Fahim ol Molk, on becoming minister a few 
months before, had reached the climax of a career 
in the financial administration, during which he 
had served in several more or less responsible 
positions. He impressed me at once with his per- 
sonal attractiveness, his intelligence, and his 
ample information on matters pertaining to Per- 
sian finances. For several weeks he had been em- 
barrassed by the lack of funds and by the demoral- 
ization in the administration, and he evidently 
welcomed the presence of one who could in the 
future draw the fire of critics and assume the 
responsibility for actions which he knew would be 
as unpopular as they were necessary. In one of 
our early interviews, he told me that I should be 
“the real Minister of Finance,” and during the 
remainder of his tenure of office he acted as if his 
sole function were to advise me regarding the 
conduct of the administration. 

In company with Fahim ol Molk, I visited the 
then Prime Minister, Ghavam os Saltaneh, who 
presented me to the other ministers. At the time 
of my arrival, Ghavam os Salteneh was being sub- 
jected to savage attacks in the Parliament ; and it 
was natural that the initiative of the Government 
should be more or less paralyzed. Following my 
call on the Prime Minister, I was received by the 



Yaliabd or Crown Prince in company with Ali 
Knli Khan, Nabil ed Dowleh, who had been Per- 
sian Minister in Washington at the time of the 
employment of Shuster, and who was at the time 
of my arrival Master of Ceremonies of the Court 
of the Crown Prince. The Valiahd — a handsome, 
genial, intelligent young man — greeted me affably 
and assured me of his friendly attitude. 

In the course of these calls, I was introduced to 
the interesting Persian custom of drinking tea. 
Whenever you visit a Persian, his servants 
promptly set before you a cup or a glass of tea 
with a bowl of lump sugar. On a little table in 
front of you there are also usually sweetmeats, 
candies, and cigarettes. If your visit is pro- 
longed, — as it is likely to be in Persia, where calls 
last commonly from one to several hours, particu- 
larly when host and guest have business matters 
of mutual interest, — tea will be repeatedly serveil 
to you, and often chocolate also. When you visit 
a Persian oflScial in his home or office, at any hour 
of the day, tea and cigarettes appear. In the 
summer, tea is supplemented by sherbet and ice- 
cream. Smoking is perhaps not so general or 
carried to such excess in individual cases as in 
America. Persians who smoke, prefer cigarettes 
of Persian tobacco and Persian make ; they rarely 
smoke cigars; and I have never seen a Persian 
with a pipe of Western model, although many 


View op the gaiidens op Goi.istax,' looking towaiiu the extkance of the Shah’s palace 


smoke the ItcXyan or water-pipe, which is some- 
times passed around when more than one Persian 
are present. 

After personal calls on the active high officials 
of the Government, I left cards at the houses of 
the ex-prime ministers and other dignitaries of 
the State, calling on a few of them personally, and 
finally completed the round of preliminary formal- 
ities by dropping cards at the foreign legations. 

With respect to calling at the foreign legations, 
I was particularly desirous to do no less and no 
more than what might be dictated by Persian eti- 
quette. Certain legations at Teheran have in the 
past taken an attitude toward the Persian Gov- 
ernment and its officials which if adopted in a 
Western capital would prompt an emphatic pro- 
test from the Government concerned and would 
lead to the recall of the offending diplomat. Cer- 
tain legations had been the mouthpiece of policies 
which, whether justly or not, created suspicion, 
distrust, and hostility in the minds of Persians. 
Many Persians who were friendly, and in some 
cases improperly friendly, to one legation, were 
hostile to another. I realized that at the time of 
our coming to Persia the situation had changed, 
and that the legations had abandoned many if not 
all of the practices which had persisted in the 
past. Nevertheless, I was engaged by contract 
to serve an independent government and it was, 



natvually, not my ■wish to give to the legations any 
recognition which might be misconstrued by the 
Persian people or the legations themselves. It 
was intimated to me that Persian administrations 
were filled with Russian and British spies and 
that many if not most of the leading Persian of- 
ficials put the interests of a foreign government 
ahead of the interests of their own country.’ The 
patriotic party in the Majless had brought the 
American Mission to Persia because they wanted 
the finances managed by neutrals. On the other 
hand, the diplomats at Teheran represented gov- 
ernments and nations which had vast and varied 
interests in Persia and would inevitably and prop- 
erly be brought into the discussion of many finan- 
cial questions. It seemed to me, therefore, that 
there should be no act on my part which might 
in any way embarrass me in the handling of 
financial questions affecting foreigners. Accord- 
ingly, on the second day after my arrival in 
Teheran I asked the Minister of Finance whether 
I should make the first call on the legations. He 
laid the matter before the Council of Ministers 
and telephoned me that such was the custom of the 
country and the Government had no objection to 
my doing so. The ministers or their charges d’af- 
faires promptly returned my call, and although 
I was later to be publicly attacked by my Persian 
and foreign enemies, I was never criticized, so far 



as I know, for establishing social relations with 
the legations. When the Russian and French 
ministers, who were absent at the time, arrived 
in Teheran, they paid the first call on me. The 
Italian minister, also arriving later, apparently 
believed that ho should receive the first call, and 
so, to my regret, we have never exchanged calls 
or enjoyed social relations. 

This whole matter of calling and dropping cards 
may seem a petty and irrelevant detail. I gave 
attention to it and speak now at some length of 
it, because matters of this kind develop in Persia, 
not altogether without reason, an extraordinary 

Intimations also were made to me that I should 
call on certain of the prominent deputies and on 
the under-secretaries of the ministries. On the 
latter I did not call; but later, when it seemed 
to me that there was some possibility of misun- 
derstanding on the part of the deputies, I left my 
card at the houses of a number of the leaders of 
the Majless. I was surprised, however, although 
on the whole reassured, to be told that one of the 
deputies had remarked on receiving my card that 
I “should get down to work and not waste time 
in dropping cards.” 

When I arrived in Teheran, the Shah had 
started back from Paris, and Reza Khan Pahlevi, 
then known simply as Reza Khan or by his title 



“Sardar Sepah,” the Commander-in-Chief of the 
Army and Minister of War, had gone to Bushire 
on the southern coast to meet him. On the day 
that I installed myself in my office at the Min- 
istry of Finance, I was visited by a friend and 
admirer of the Minister of War, a young English- 
speaking Persian named Mirza Beza Khtin Af- 
shar, who had studied at Ohio State University 
and at Columbia. He brought me a cordial letter 
of welcome from the Minister of War; and as Af- 
shar had an excellent command of English, I took 
him, at his request, into my service as interpreter. 
In this capacity he worked faithfully and loyally 
until in 1923 he was elected a deputy of the Maj- 
less from Urumiah, his native place. Another 
letter from the Minister of War had been handed 
me the previous day by Mirza Sultan Mohammed 
Khan Amerie, a young English-speaking Persian 
in charge of the Indirect Tax Administration, who 
enjoyed the confidence of the Minister of War and 
who was later to become one of our most useful 
Persian assistants. These letters from Beza 
Khan confirmed by other information left me in 
no doubt that this powerful personage had a keen 
appreciation of the bearing of finance on military 
power and that ho was desirous of establishing 
relations of friendship and cooperation with the 
American Mission. 

With the minister, I went through the formality 



of visiting the various administrations and bu- 
reaus, and then in the following weeks began seri- 
ously to familiarize myself with organization and 
procedure and to collect as much information as 
possible concerning the financial situation. I 
found that it was as difficult in Teheran as it was 
in Washington to obtain an adequate presentation 
of the facts. With the exception of the Customs 
Administration, which had been under Belgian 
direction for a quarter-century and had reports 
and reflations printed in French, and the In- 
direct Tax Administration, which supplied me 
with a clear and detailed memorandum in English, 
prepared by Amerie, we were unable to inform 
ourselves concerning the various branches of the 
administration except in a painfully slow, uncer- 
tain, and piecemeal manner. We had consulta- 
tions day and night with Persians reputed to be 
honest and experienced in the finances. We dis- 
covered in these consultations that most Persians 
find it difficult to adopt an objective point of view. 
They were attempting to impress us with their 
long experience and honest service ; and there was 
scarcely one that had not performed, according 
to his own testimony, notable achievements in in- 
creasing the revenues. Many of them warned us 
of the intrigues of Persians and foreigners 
against us ; aiid all of them expressed an earnest 
wish to devote their abilities, at adequate salaries, 



to the service of the American Mission. I re- 
ceived under the seal of secrecy reports concern- 
ing the alleged dishonest activities of scores of 
Persian and foreign employees of the ministry, 
and I received anonymous letters warning me 
against people, ranging from my head servant to 
the Prime Minister. I filed these various reports 
and letters and gave them no attention at the 
time, because it was my determination to make no 
move in an atmosphere of suspicion and intrigue 
without being reasonably sure of the facts. My 
American colleagues, assigned to their respective 
branches of administration, were having similar 
experiences and following a similar policy. Mr. 
Gore, an expert auditor, assumed the direction of 
the Administration of General Accounts; Dr. 
Bogart took charge of the Bank-i-Iran and the 
Imperial Mint; Mr. Early took over the Admin- 
istration of Direct Taxation; Mr. McCaskey, who 
had been engaged as Director of Indirect Taxa- 
tion, was assigned to supervise Treasury opera- 
tions ; Colonel MacCormack and Mr. Mitchell, who 
had been engaged as provincial directors, were 
temporarily assigned to the investigation of the 
revenues. When Mr. Jones and Major Hall ar- 
rived during the winter, the former was sent to 
the Province of Azerbaidjan and the latter to 
Khorassan. Mr. Dunaway, Mr. Pearson, and Mr. 
Flannagan took up their work in my own office. 



M. Lambert Molitor^Le Belgian Administrator- 
General of the Customs, had been employed in 
Persia for over twenty years, and with a staff of 
about a dozen Belgian officials was exercising a 
thorough control over the Customs Administra- 
tion. A few weeks before the arrival of the 
American Mission, the contracts of the Belgian 
officials had been renewed for three years. The 
discovery of this fact, after my arrival, caused me 
no disappointment, for although my contract pro- 
vides that no foreign official shall be employed in 
the financial administration without my approval, 
it was far from my intention to attempt to get rid 
of the Belgians, or, in the absence of clear admin- 
istrative reasons, to interfere with their work. 
It seemed to be the part of wisdom to give our 
first attention to the other administrations, which 
had lacked foreign direction,' and to turn to the 
Customs Administration, which appeared to be al- 
ready well organized, only when it obviously re- 
quired attention. When I entered Persia, the 
Belgian officials in the provinces met me with a 
message from Monsieur Molitor in which he gave 
me assurances of his loyal cooperation ; on my ar- 
rival in Teheran, Monsieur Molitor gave these 
assurances his personal confirmation; and the 
Belgian charge d’affaires lost no time in return- 
ing my call and assuring me of the cordial sup- 
port of the whole Belgian community. I have 



never had reason to doubt the sincerity of these 
assurances. Monsieur Molitor and his Belgian 
associates have worked with their American col- 
leagues without friction or perceptible jealousy. 
Had Monsieur Molitor been influenced by the in- 
trigues which later started, or had he entertained 
petty personal considerations, our relations might 
have been less happy and the work of the Amer- 
ican Mission correspondingly complicated. 

In spite of the specific provisions of my con- 
tract, one of the first important questions that 
had to be decided was whether the American Mis- 
sion was to be a group of advisers or of adminis- 
trators. The Persian Government had originally 
asked for a Financial Adviser. Such was the 
title that had been borne by Mr. Armitage-Smith 
and Monsieur Bizot had been permitted to advise 
only. Indeed, Monsieur Bizot, whom I met in 
Paris, told me in many phrases that I must spend 
at least two years in investigation and study be- 
fore attempting to take any positive action. Be- 
fore my engagement, the Persian Government 
had instructed its legation at Washington to urge 
the Financial Adviser, whoever he might be, to 
come to Persia without defined powers. Upon 
my insistence that certain specific powers be ac- 
corded me, the Majless, when including these 
powers in the law of my engagement, changed my 
title from Financial Adviser to Administrator- 



General of the Finances. In any event, it was 
never my intention that the American Mission 
should be a group of advisers with no power to get 
their advice accepted and executed. I realized 
that the finances of Persia could not be reformed 
without radical action, and that the general prin- 
ciples of sound fiscal administration were quite as 
well known to the Persians as to us. The Per- 
sians, however, as they themselves knew, were 
helpless to put these principles into practice, 
mainly for the simple reason that they were in 
politics. In spite of the obviousness of our posi- 
tion, the Minister of Finance was apparently 
laboring under a misunderstanding. He began 
by addressing me as le Conseiller in French and 
Mostashar in Persian, meaning “adviser,” and 
before I had definitely selected Afshar as my in- 
terpreter, the minister transferred from the Cus- 
toms Administration to my office a friend of his 
to be my “Chief of Cabinet.” I sent the young 
man back whence he had come, and called the min- 
ister ’s attention to my contractual power over 
all appointments. In accordance with my con- 
tractual power over payments, I also issued an 
order to the Imperial Bank of Persia that no check 
drawn by the Government should be honored un- 
less it bore my counter-signature. A few days 
later, the minister signed with me a joint instruc- 
tion to all the branches of the financial adminis- 



tration to the effect that in the future all em- 
ployees were to be responsible in the first instance 
to me and no order or instruction should be 
obeyed unless it bore my signature. A firm in- 
sistence in the early days on the recognition of 
my contract powers, was, I am convinced, the only 
means by which I should ever have had any op- 
portunity whatever to exercise those powers. 
Had the American Mission conae to Persia with- 
out powers, or, possessing paper powers, had 
elected to become advisers, we should doubtless 
have been less hard worked, less harassed, and 
in some quarters more popular, but we should 
have been a sore disappointment to those deputies 
of the Majless and other Persian patriots who 
looked to the American Mission for energetic, 
action and effective leadership. 

It is true that, unfamiliar as we then were with 
Persian conditions, it was necessary to take no 
fundamental action except after much investiga- 
tion and study. During the first months, we in- 
variably told callers who came with complaints, 
proposals, claims, or other business, that no 
decision could be taken until after careful in- 
vestigation. Dossiers had to be translated and 
completed; accounts, most of which were far in 
arrears, had to be obtained and examined; most 
important of all, it was necessary to ascertain cur- 
rent fiscal needs and the revenue possibilities, be- 



fore we could lay down any plan for the handling 
of individual cases, which usually involved ar- 
r eared obligations. We proceeded with the reor- 
ganization of the jSnancial administration little by 
little and most cautiously, and it was not until the 
second year of our work that we were ready to 
propose to the Majless any taxation projects. 

Effective control of the financial administration 
was, however, the essential thing. To get it at all, 
we had to get it quickly. After getting it, al- 
though we found that it burdened us with an 
enormous amount of responsibility and routine 
work, it enabled us immediately to stop the visible 
leaks and to make the obviously necessary im- 
provements; and incidentally it afforded us by 
far the best opportunity to get the information 
needed for our investigations. 

The next important decision concerned the 
Minister of War. My first glimpse of this ex- 
traordinary man was in a garden just outside the 
city walls on a December day in 1922, at the end 
of his long journey from Bushire, where he had 
met the Shah on the return of the latter from 
Paris. Eeza Khan was walking among his oflScers 
— a tall, straight, powerful figure ; a strong, ruddy 
face ; eyes and nose like those of an eagle. There 
was much in his appearance to indicate strong 
will. I was to learn later, from personal contacts, 
of his courtesy, cordiality, and common sense. 



From humble origins, Beza Khan had sprung sud- 
denly into prominence in 1921 at the time of the 
coup d’etat of Seyed Zia Din who, becoming Prime 
Minister, had made Beza Khan Minister of War. 
Ho has since remained continuously Minister of 
War and Commander-in-Chief of the Army. 
Gifted with unusual powers of decision and leader- 
ship, a stern disciplinarian, possessing organiz- 
ing ability of no mean order, he had built up a 
well-drilled and well-equipped army with which 
he had already subjugated the tribes of Azerbaid- 
jan and was maintaining satisfactory conditions 
of order and security throughout most of the coun- 
try. There was a tendency to look upon him as 
a dictator, and ho was regarded by all Persians 
with wholesome respect. He was tenacious of his 
power and prestige ; ho naturally looked upon the 
army, his own personal creation, with the keenest 
pride and affection, and rightly considered it the 
first essential instrument in the unification, nation- 
alization, and reconstruction of the country. Nat- 
urally, he was likely to be on his guard against 
anybody who by chance might fail to appreciate 
the services of the army or who might take steps 
which would diminish its prestige or impair its 
strength. He was stated to have been in favor of 
the coming of the American Mission, and it was, 
I am convinced, his purpose to give it support ; but 



he must have viewed with no little apprehension 
this group of strangers whose work might affect 
profoundly all branches of the Government, in- 
cluding the army. 

Reza Khan’s apprehension was doubtless 
heightened by the fact that, nine months before, he 
had taken over a large part of the financial ad- 
ministration in order to insure the payment of 
the troops. He had realized with his character- 
istic directness and good sense that an army 
could not be kept together without food, cloth- 
ing, and equipment ; and, to provide these 
essentials, it had to be regularly and ade- 
quately paid. He has the utmost confidence in 
his own power to get things done; and when the 
disorganized politics-infested Ministry of Finance 
failed to furnish the necessary funds, he had cer- 
tain of its branches transferred temporarily to 
the Ministry of War, to be directed by his own 
appointees, the revenues to be paid directly to the 
army. When we arrived in Teheran, the Admin- 
istration of Indirect Taxation, — comprising the 
important opium, tobacco, excise, and miscellane- 
ous indirect taxes, — the Administration of Public 
Domains, the Alimentation Service, and the finan- 
cial agency of Teheran, were administered di- 
rectly and their net revenues received by the 
Ministry of War. In addition, that ministry re- 



ceived the surplus revenues of the Telegraphs 
Administration of the Ministry of Posts and Tele- 

In the absence of a national army or constab- 
ulary, Shuster had been compelled, in order to 
have the force necessary to collect the taxes, to 
organize a Treasury Gendarmerie. I also real- 
ized that, in order to collect the taxes, the exist- 
ence of force, if not the actual use of it, would be 
in our case equally necessary. • With an adequate 
force already organized by Reza Khan, it was 
clearly inadvisable for us to undertake the crea- 
tion of a gendarmerie which would have dupli- 
cated expenses, and which would, moreover, have 
furnished occasions for friction and misunder- 
standing between the Ministries of War and Fi- 
nance. Needing force to collect the revenues, 1 
saw no other course than to try in every way 
possible to win the support and cooperation of 
Reza Khan and through him the support and co- 
operation of the army. 

From a broader point of view, I looked upon 
Reza Khan as one of the most significant and en- 
couraging phenomena in Persia. He seemed to be 
the leader that the country needed. He had shown 
constructive genius ; he had taken the preliminary 
steps necessary to the making of a modem nation ; 
it was apparent that no hope existed for the sol- 
vency, prosperity, and progress of Persia except 



on the basis of peace, order, and security; it oc- 
curred to me, also, that it would be difficult to 
conceive of any justification for foreign interfer- 
ence if the Persian Government showed that it 
was able according to modern standards to pro- 
tect lives and property and to execute the law 
within its borders. It seemed essential that in 
return for the cooperation which I expected from 
Eeza Khan, I should endeavor to assist him so far 
as possible in the accomplishment of those aims 
which were for the good of Persia. On the other 
hand, it was clearly necessary for us to obtain 
direct control over all branches of the financial 
administration and to centralize in our hands, to 
the utmost possible extent, all the revenues and ex- 
penditures of the country. 

Calling on Eeza Khan at his house with Pahim 
ol Molk and Afshar, I found that his attitude and 
remarks tended to confirm the conclusions that I 
had reached. Accordingly, I proposed that he re- 
turn to the Ministry of Finance the administra- 
tions which were then under his control; that he 
render to the Ministry of Finance an appropriate 
accounting of the army expenditures; and that in 
return the Ministry of Finance, if we were able 
to obtain an advance from the Imperial Bank of 
Persia, should guarantee the regular payment of 
the army budget until the end of the fiscal year, 
i. e., March 21, 1923. To these proposals he 



agreed and the interview was closed with mutual 
assurances of friendship and cooperation. 

We immediately arranged for an advance from 
the bank of four million tomans, and not only 
kept our promise regarding regular payments to 
the army for many months after the end of the 
fiscal year, but since December, 1922, have paid — 
on occasions, of course, with some delay — all the 
current authorized expenditures of the Govern- 
ment. Eeza Khan promptly returned the trans- 
ferred administrations. Colonel MacCormack 
took charge of the Administration of Public Do- 
mains, the Alimentation Service, and the Teheran 
Financial Agency, and Mr. Mitchell was assigned 
to supervise the Administration of Indirect Tax- 

We had another object in view in obtaining the 
advance from the bank. We arrived in Persia 
about four months before the close of the fiscal 
year. The treasury was empty. Payments of 
salaries and other expenses of the Government 
were at that time from one to eight months in ar- 
rears, and there were for previous years various 
unpaid obligations amounting to large sums. 
The school-teachers and the police were unpaid 
and were threatening to strike. Pensioners, of 
whom there were about fifty thousand, were tak- 
ing hast, gathering at the Ministry of Finance, 
and otherwise contributing to the demoralization 



of the administrations. There were various 
claims by foreigners and foreign governments. 
The Court had not received any money for several 
months. The salaries of the deputies of the Maj- 
less were in arrears. Dealers to whom the Gov- 
ernment owed money were refusing to furnish 
further supplies until they received payment. 
Employees of the Ministry of Finance engaged in 
the collection and handling of revenues were not 
receiving their salaries; and in such a situation, 
with the loose control then exercised, they natu- 
rally not only helped themselves from such rev- 
enues as passed through their hands, but also were 
not over-energetic in the collection of revenue. 
Furthermore, we could foresee for several months 
no prospect of a substantial increase of revenue. 
The oil royalties for the year 1922-23 would not 
be paid until December, 1923. It appeared to be 
necessary, therefore, to relieve the pressure on the 
Ministry of Finance in order to begin our work; 
to reestablish, so far as possible, the morale of 
government employees, particularly those con- 
cerned with the finances and with the maintenance 
of order in the cities; and finally to obtain the 
confidence and support of the people, who judge 
the success of a financial administration largely 
by its ability to make payments. 

It is a pleasure to record in this connection one 
of the most heartening surprises that I have ex- 



perienced in Persia. When we went to Persia, I 
was told that we should be expected to perform 
the impossible ; to draw from the thin air and arid 
plains a miraculous flow of gold, or, like the 
swarthy magician who entertains tourists at Cairo 
by extracting live chickens from their pockets, to 
conjure loans and investments out of the pockets 
of surprised and delighted Western bankers. 
The experiences of Persian officialdom since 1890 
had been perverting and corrupting. Big busi- 
ness, engaged in sharp competition in a weak 
country, does not preoccupy itself with the train- 
ing of the people or with the elevation of their 
moral standards. It would not have been surpris- 
ing, therefore, if the Persians had expected some- 
thing from us which we were not prepared to give, 
or if they had lost hope in the capacity of Persia 
to finance itself. Persian officials in the past 
have of course sought, and at times received, 
foreign loans, not for productive and constructive 
purposes or even for meeting the legitimate cur- 
rent expenses of the Government but rather for 
the corrupt enrichment of politicians. It is true 
that the governments that have been in power 
in Persia during the last two years also desire, 
like the governments of many other countries, 
to obtain foreign loans, and have made it quite 
clear that they prefer to raise the loans in 
America; but they fully accept the principle that 



any such loans should be expended under the strict 
control of the American Mission and only for pro- 
ductive and constructive purposes. Persian of- 
ficials, and deputies of the Majless at the time of 
our arrival, were heartily sick of subsidies to be 
frittered away by extravagant and corrupt offi- 
cials, and of advances from foreign governments 
or foreign companies conditioned by political fa- 
vors or economic concessions. They were in many 
respects as suspicious and careful in considering 
a loan proposition as would be the lending banker 
himself. It may be added that the Constitution 
provides that no loan can be contracted by the 
Persian Government without the approval of the 




T he more information we gathered, the 
more humility we felt. One foreign news- 
paper had intimated that only supermen 
could accomplish the work we had undertaken. 
We realized quite well that we were not supermen 
or financial geniuses. As a matter of fact, the 
job in Persia, from the information I had obtained 
in America, did not seem to me to be, on the whole, 
a job for financial experts in the narrow sense. 
The financial situation in Persia, however bad' it 
might prove on acquaintance to be, seemed a 
symptom of a disorder rather than the disorder 
itself. As so-called rheumatism can often be 
cured by a dentist, so it seemed to me that the 
financial troubles of Persia would eventually be 
relieved by the removal of the hidden sources of 

The condition of Persian finances in 1922, does 
not constitute any ipso-facto condemnation of 
Persian capacity. There is abundant financial 
ability among the Persians; and there were and 
still are numerous Persians who not only know as 



well as we do what reform measures should be 
adopted but also have the requisite energy, 
courage, and will to undertake the task. Persian 
ministers of finance, with honest intentions, had 
undertaken the task, but they had failed because 
the storm created by reform was too powerful for 
political appointees to weather. 

Financial disorders appear in all countries. 
Finance, as I see it, is not an exact science. 
Western nations have all had their financial 
troubles and have learned by experience. Up to 
a few years ago the United States had suffered 
from a recurring series of crises and panics; we 
had had “wild-cat” banks, an inflated currency, 
and “cheap” money movements ; we had, at times, 
issued bonds to pay current expenses; in our ex- 
penditures we have been prodigiously wasteful; 
we have had no semblance of a national budget 
system until within the past few years ; one State 
Capitol bears splendid witness, it is supposed, to 
the graft which entered into its construction and 
furnishing; only a few months ago, a branch of 
our own Treasury Department was grossly, per- 
haps criminally, mismanaging and wasting its 
appropriations, which in amount roughly approxi- 
mate the budget of the Persian Government; 
much of the corporation financing in America, 
public and private, to judge from recent legis- 
lation, is considered to be unsound if no longer 



actually “frenzied”; scarcely a financial step has 
been taken by our Treasury Department which 
has not been met by the criticism of experts. 
And the experts themselves, if they were given 
executive authority, could do little better, unless 
they combined with financial skill a divine under- 
standing of the feelings and forces that pervade 
a complex modern society. 

The financial problems of Persia seem to have 
been little different, essentially, from those which 
appear sporadically in America and which can 
be found in many other countries at the present 

The first of the differences between Persia and 
some of the other countries that occurs to me, is 
that Persia has always been, up to this time, near 
the margin of financial subsistence; her budget 
has been small; her economic system almost sta- 
tionary ; her taxes inelastic ; and her expenditures 
inadequate for her expanding needs. In Persia, 
therefore, any disorder, inefficiency, waste, leak- 
age, irregularity, or error, has been relatively 
more conspicuous and serious than in many other 
countries, which doubtless suffer from the same 
conditions but which nevertheless enjoy a fairly 
good rating. Another obvious difference between 
Persia and some other countries is that Persia 
has not had time to establish an administratively 
efficient political organization. For that matter, 



few other countries have solved this problem. 
Persia appreciates, perhaps more than other 
countries, the need of experts in her administra- 
tions, and she has been no slower than other coun- 
tries in putting into effect the approved legisla- 
tive principles which are supposed to encourage 
and protect administrative efficiency. Persia, 
however, cannot do everything at once, any more 
than other countries. 

The natural effects of politically induced mal- 
administration were aggravated by the war and 
by the subsequent economic depression. During 
the war, the country was overrun, portions of the 
territory devastated, exports reduced, and gov- 
ernment thrown into chaos. On our arrival a 
number of refugees were in Teheran from the 
devastated area of Azerbaidjan. They had taken 
bast in the Majless, and the Government was 
giving them a subsidy, but had taken no effective 
steps toward sending them back to their homes or 
toward rehabilitating their properties. Although 
some had once been prosperous proprietors, they 
were tending rapidly toward pauperization. A 
fund had been raised by private contributions 
for the relief of Urumiah; but a part of this 
fund had been loaned to the people of Guilan, 
who also suffered sorely from the war, and 
the balance had been deposited with the banking 
firm of Toumaniatz Freres, which shortly after 



had gone bankrupt. As a result of the criminal 
misplacement of the fund, none of it had been 
advanced to the people for whom it was intended. 

In 1922, the country was just getting on its 
feet and taking breath preparatory to a slow 
economic recovery. Evidences of business de- 
pression were everywhere. Some of the nuost 
famous of the pre-war banking firms and mer- 
chants were bankrupt. Once-wealthy landowners 
were insolvent. Once-flourishing industries had 
languished. There was lack of confidence every- 
where. Hardly a city, town, or village in the 
country, with the possible exception of Tabriz, 
showed any evidence of growth. Under such cir- 
cumstances, it was surprising that the system of 
responsible government was working as .well as it 
did; and the absence of revolutionary or Bolshe- 
vistic tendencies, at such a time, constitutes h. 
tribute to the inherent stability of the Persian. 

The demoralizing and wasteful effects of poli- 
tics were apparent everywhere. With an aver- 
age tenure of three months, and with much polit- 
ical pressure on him, a minister of finance was 
unable, as a rule, to know his administration or 
to carry out any far-reaching programs. Polit- 
ical opportunism determined his course of action. 
Even if he were personally honest, he could not 
oppose those who were politically influential. 
Under the circumstances, when a delicate question 



presented itself he usually preferred to make no 
decision at all rather than to run the risk of 
making an enemy. Persian ofl5cials wore past 
masters in the gentle art of “passing the buck.” 
When some action had to be taken, a commission 
was usually appointed which, unable or unwilling 
to come to a clear-cut decision, was followed by 
another similar body. In many cases conunis- 
sions are useful coordinating agencies, but in 
Persia they were too frequently set up for pur- 
poses of delay. Correspondence with taxpayers 
in arrears dragged on with no decisive action. 
Dossiers grew to voluminous proportions. Cases 
were never closed. Positions, if not sold out- 
right, were given to men simply because they 
were the relatives or friends of powerful per- 
sonages. Nepotism reigned. Meritorious work 
only occasionally met with reward. Dismissals 
for incompetence and promotions for merit were 
equally rare. Disponsibles, many of them cap- 
able young men, were numbered by the hundreds, 
reflecting the wide-spread state of unemployment 
in the country. 

OflSces were over-staffed and a majority of the 
employees were underpaid. Tax-collectors and 
local inspectors, paid as low as six tomans a 
month, naturally eked out their living by extor- 
tion, accepting bribes, or other illegitimate prac- 
tices. In spite of low salaries and little actual 



work, the expenditures of the ministry exceeded 
its budget. 

There was a general absence of the methods of 
control usually found in financial administrations. 
Forms were few, inspections infrequent, and 
auditing nearly a lost art. A dozen so-called in- 
spectors were at desks in the ministry and they 
immediately made a collective complaint to me 
that they were given nothing to do. 

Almost one half of the revenue of the country 
was derived from the customs tariff. The cus- 
toms receipts, which had fallen to two and one 
half million tomans in 1917-18, had risen to almost 
seven million in 1922-23. The administration of 
the customs revenues was in the hands of foreign 
experts, and, happily, called for no immediate at- 
tention on our part; but the tariff itself was a 
problem of the first magnitude. 

In the Treaty of Turkoman Chai, of February 
22, 1828, following, the Russo-Persian War, a 
reciprocal five-per-cent, ad-valorem tariff on im- 
ports and exports was established between the 
two countries. No period for this agreement was 
stated in the treaty, and, consequently, up to the 
World War, Persia was unable without the con- 
sent of the Russian Government to change any 
tariff rate affecting Russia. Treatment equiv- 
alent to that accorded Russia was in the course of 
time demanded by and granted other nations. In 

. 58 


these treaties, however, the five-per-cent, rate was 
applied only to imports into and exports from 
Persia and was not accorded on imports of 
Persian goods into other countries, which re- 
ceived, instead, the benefit of the most-favored- 
nation clause. In 1901, the Shah, being in need 
of a foreign loan, was obliged to negotiate with 
Pussia for a revision of the tariff. The resulting 
tariff, effective February 8, 1903, was placed on 
a specific basis, export duties were largely elim- 
inated, and low rates were placed on commodities 
of interest to Bussia. On February 9, 1903, an 
agreement was entered into with Great Britain 
by which certain rates were modified in the 
interest of British trade. The epitomized result 
was that the commodities of interest to Russia 
bore an average tax of 4.75 per cent., while 
commodities of interest to Great Britain paid an 
average of 26.77 per cent. This tariff was deeply 
resented by the Persian merchants, but their pro- 
tests were without result. In his “Strangling of 
Persia,” Shuster states that this tariff was 
“absolutely prejudicial to the interests of Persia 
and is so grossly partial to Russian interests and 
trade as to render it the most conspicuously un- 
successful tariff in the world, from the viewpoint 
of the people in whose behalf it is supposed to be 
framed.”^ In connection with the proposed 

1 Strangling of Persia, p. 313. 



Anglo-Persian Agreement, a new tariff was writ- 
ten by a joint commission of representatives of 
the two countries. It was decided to augment the 
revenues of the Persian Government, and to that 
end the sclicdules were generally increased. In 
this 1920 tariff agreement, however, a provision 
was inserted for a joint revision of the tariff in 
the future and reductions were arranged on 
British goods considered to have been overtaxed 
in the tariff of 1903. Nevertheless, the average 
rate, in the 1920 tariff, on the principal commod- 
ities of interest to Russia was 13.07 per cent., 
while the average on those of interest to Great 
Britain was 14.88 per cent. A slight advantage 
remained with Russian trade, but on the whole 
an equality was established between the two coun- 
tries, and this tariff represented a distinct im- 
provement so far as the interests of Persia w^ire 
concerned. It was put into effect March 22, 1920, 
and was enforced for nearly two years. Although 
the Soviet Government, in 1921, denounced all 
treaties and conventions concluded by the former 
Czarist Government with Persia, — including, nat- 
urally, the Customs Convention of 1903, — ^it 
nevertheless insisted on a return to that tariff 
pending the determination of the rates to be 
levied on Russian goods as provided for in an- 
other article of the Treaty of 1921. As a result, 
the merchandise of all nations other than Russia 

• eo 


was paying customs duties according to the 1920 
tariif, while Russian goods were paying the 
duties of 1903. The treasury was suffering a 
loss estimated at one million tomans a year, the 
principle of equality of commercial opportunity, 
to which the countries concerned have given their 
verbal adherence, was set at naught through no 
fault of the Persian Government, and the dis- 
crimination which existed was giving to other na- 
tions and to a large body of Persian merchants a 
just cause of complaint. 

The second important source of external rev- 
enue were the oil royalties from the concession, in 
the South, of the Anglo-Persian Oil Company. 
These revenues had risen to their highest point 
in 1921, and in the year of our arrival had started 
a decline which, in the face of increasing produc- 
tion, was discouraging and inexplicable to the 
Persians. The latter were hoping, however, to 
obtain another source of revenue in the northern 
oil concession, but at the time of our arrival nego- 
tiations had dragged on for more than a year and 
were still undecided. 

The internal taxes of the country wore a cha- 
otic mixture of customary survivals and legisla- 
tive enactment, for an adequate discussion of 
which a volume would be required. Since my pur- 
pose is to tell the story of the American Mission 
in the light of the problems that faced it, I shall 



not attempt a comprehensive exposition of this 
or any other branch of the fiscal system. 

The internal revenue had in the past been for 
the most part farmed out or collected by the 
provincial governors and tribal chiefs. When we 
arrived, the governors had in general lost their 
revenue-collecting function, although they were 
still inclined to interfere in this connection with 
the activities of the financial agents. Generally 
speaking, the chiefs of the great tribes collected 
the taxes of the tribes ; and the Sheikh of Moham- 
merah in Khozistan was virtually in the position 
of a tributary chief, who was waxing rich on the 
revenues of his province and was not compolled to 
pay his tribute to the Central Government. The 
practice of farming revenues had been thoroughly 
discredited by the unsavory and unprofitable to- 
bacco and opium monopolies ; but there was, when 
we came, a proposition under consideration to 
lease the government monopoly of sheep’s intes- 
tines; and the collection of many of the minor 
miscellaneous taxes was granted by contract to 
private individuals. 

Of the sources of internal revenue, there were 
three which were identified directly with agricul- 
ture. The direct tax on arbabi or privately 
owned lands, commonly called the maliat, was in 
general, particularly when a survey had been 
made, a tithe of the proprietor’s net share of the 



product of the village ; when no survey had been 
made, the tax was levied in accordance with the 
tax roll. A survey is a rough census of a village, 
including the area of cultivated land, its produc- 
ing capacity, its live stock, its number of fruit- 
trees, and its population. Surveys had been car- 
ried out mainly to adjust the complaints of 
taxpayers, and had never extended to more than 
a fraction of the landed property in the country. 
The main dependence in collecting this tax, there- 
fore, was on the ancient rolls, which were partly 
in the hands of the mostowfis. Since the rolls 
had been prepared, great changes had occurred. 
New villages had appeared which were not taxed 
at all; villages which had disappeared were still 
taxed; other villages were undertaxed or over- 
taxed, according to their growth or decline. 

Before we arrived, steps had already been 
taken to modernize the archaic tax system. A 
project of law had been introduced into the Maj- 
less providing for a survey of all the landed prop- 
erty in the whole country and fixing a uniform tax 
on land. 

We found under the administration of the Min- 
istry of Finance extensive areas known as kJialis- 
seh or public domains. Originally all the land in 
the country had theoretically belonged to the 
Crown, but in course of time most of it had passed 
to private ownership. To the publicly owned 



areas remaining, were added lands which had 
been seized from rebels, or acquired by the Gov- 
ernment in other ways. 

The units commonly used in Persia in describ- 
ing land holdings are the village and the pasture. 
The village may be of any size and may have sev- 
eral subsidiary villages around it. Likewise, the 
pasture may be sufficient only for the live stoclc of 
a small village or large enough to permit the 
summer grazing of the flocks of an entire tribe. 

It was impossible to estimate the area of the 
pastures and barren and uncultivated lands 
owned by the State; but although the records 
were incomplete, a fairly accurate idea could 
be gained of the number and area of the vil- 

There was a total of 1245 villages recorded as 
public domains, of which 360 were in Azerbaid- 
•jan, and 179 in the Province of Teheran, 'ftie 
area of the villages in the latter province had 
been determined with fair accuracy at 250 square 
miles. On that basis the Government-owned vil- 
lages of the whole empire could be conservatively 
estimated in area at 1750 square miles. There 
were, however, vast areas owned by the State 
which were not included in the list of recorded 
.villages. The Province of Seistan, for example, 
with an area of three thousand square miles, was 
almost entirely the property of the Government. 



Many public-domains villages, particularly in 
the Province of Mazanderan, had fallen into the 
hands of private individuals, and other villages 
which had been seized by the Government were 
claimed by individuals. Disputes between the 
Ministry of Finance and individuals regarding 
the ownership of villages had filled many dossiers 
in the ministry, had led to the formation of many 
commissions, and had engaged the attention of 
the Council of Ministers. 

The Tribunal of the Ministry of Finance — ^at 
that time, perhaps, the only permanent adminis- 
trative court in the Government — ^was supposed 
to have jurisdiction over these cases. The Coun- 
cil of Ministers had, also, established a permanent 
Commission of Farmans, consisting largely of old 
mostowfis, for the sole purpose of examining and 
determining the validity of royal farmans pos- 
sessed by individuals. Previous to our coming, a 
number of forged farmans had been discovered, 
but no effective action had been taken against the 
perpetrators. In order still further to quiet 
titles, the Council of Ministers had decided for 
the guidance of the Commission of Farmans that 
any village which had been in the continuous pos- 
session of an individual for thirty years or more 
should be considered the private property of that 
individual. The Council of Ministers, however, 
had subsequently issued other decisions on the 



subject, and little progress had in fact been made 
with respect to the settlement of land disputes. 
This was one of the problems which we were 
called upon to assist in solving. 

The public domains were either leased to 
private individuals or operated directly by the 
Government ; but the Government had not proved 
itself efficient either as a landlord or as a pro- 
prietor. Many of the public-domains villages 
were ruined; scarcely one was in a prosperous 

Many of the public domains had been leased by 
royal farmans to individuals on condition that a 
percentage of the crops should be paid to the 
Government as rent. Due to the changed condi- 
tions, the rent fixed at the time of cession bore no 
longer any relation to the producing value of- the 
properties, and the Ministry of Finance found it 
difficult and in many cases impossible to collect 
the full rent of the ceded domains. 

At the time of our arrival, the Minister of Fi- 
nance had already drafted projects, for submis- 
sion to the Majless, for the sale of the public do- 
mains of Teheran Province and for the adjust- 
ment of the rent of ceded domains. 

Extensive and valuable properties known as 
owghafsaukaf, endowments or pious foundations, 
were scattered over the country. These were, in 
general, the bequests of individuals who in their 



wills had stipulated that the income of the property 
should be devoted to religious, educational, chari- 
table, or, in a few instances, other specified pur- 
poses. Most of these properties were managed 
by clericals under the supervision, prescribed by 
law, of the Ministry of Public Instruction. Five 
per cent, of the revenue therefrom was supposed 
to be paid to the Government, to defray the ex- 
penses of supervision, but the actual receipts 
from this source were insignificant. There was, 
apparently, no complete list or valuation of the 
properties, and the Government’s part in their 
administration was extremely weak. 

There were no taxes on commercial documents, 
on non-rented real estate in cities, on incomes, on 
sales, or on inheritances. Generally speaking, the 
landowners were heavily taxed as compared with 
the merchants. 

The khanevari, a kind of conscription-tax paid 
by the villagers, had survived from a time when 
quotas of soldiers were assigned to the villages. 
This tax, as well as the poll-tax which also had 
survived, was inequitable and extremely unpop- 

A large part of the direct taxes were paid in 
kind, i. e.» in wheat, barley, straw, rice, or other 
products. It was impossible to convert all of 
these kind taxes, — that is, to collect from the pro- 
prietor their value in cash, — ^because in many 



regions in Persia there was not yet any general 
conunerce in agricultural products with a re- 
sulting money economy. There were, however, 
frequent conversions, usually at the request of the 
taxpayer; and these conversions, as well as the 
sales of the tax-grain, presented much difficulty 
and opportunity for dishonesty. 

The land-taxes had not been collected in’ full. 
Exemptions and reductions had been given on no 
equitable or sound basis, and some of the largest 
taxpayers had failed for years to pay their taxes 
and owed amounts ranging from a few thousand 
tomans to several hundred thousand. Many Per- 
sians urged me to make no attempt to collect 
these arrears. In the actual collections there 
were numerous irregularities. Collectors fre- 
quently gave personal receipts to taxpayers and 
the revenues received went into the pockets of the 
•collectors. Occasionally receipts were given for 
large amounts when no money had been collected. 

Two important taxes were levied on transporta- 
tion: the road-tolls collected on means of trans- 
port using the constructed highways, and the 
navaghel collected at the gates of the cities and 
towns. With respect to both of these revenues, 
there were serious leakages, and both were viewed 
with disfavor, particularly by foreigners. Cer- 
tain of the legations had protested against the 



navaghel on treaty grounds. Both taxes seemed 
to us to be theoretically had, but in practice it 
was impossible to abolish them until we found 
some other revenue to take their place. 

Of the indirect taxes, the most important were 
the taxes on opium and tobacco and the excise or 
tax on intoxicating liquors. While an important 
source of revenue, opium as a problem in Persia 
is less fiscal than it is hygienic, moral, economic, 
and political. It will therefore be discussed in 
another chapter. The tobacco-tax seemed to 
offer no special difficulties. The excise was in 
a peculiar situation, due to the fact that traffic in 
intoxicating liquors, while not actively or effec- 
tively prohibited, falls under a religious ban and 
therefore receives no legal sanction; and the col- 
lection of the excise tax was sometimes opposed 
because it seemed to involve an official recogni- 
tion of a practice which was contrary to religious 

There were about two hundred miscellaneous 
taxes^ most of them customary and many of them 
local. These taxes, which had been abandoned 
here and there, were vexatious to the people and 
led to much difficulty. Constituting a veritable 
fiscal junk-shop, they included taxes on fish 
markets, on rafts, on charcoal, on the transport of 
melted butter, on cutting the throats of dying ani- 



mals, on lotteries, on gallnuts, and direct taxes on 
one hundred and forty-nine occupations, mostly 

Aside from the revenues which were being 
temporarily collected by the Ministry of War, 
there were various receipts collected by other 
ministries, the most important being the revenues 
of the Ministries of Posts and Telegraphs and of 
Public Works. 

The Ministry of Posts and Telegraphs, with 
substantial revenues and a large organization, en- 
joyed virtually a free hand with its revenue and 
expenditures. A part of the services of the Min- 
istry of Posts and Telegraphs has been for many 
years monopolized by Mokhber ed Dowleh, whoso 
extensive Teheran park had been rented and put 
at our disposal by the Government. After the 
death of Mokhber ed Dowleh, some years befoiie, 
the ministry which he had exploited with so much 
profit to himself seems to have been considered 
the peculiar appanage of his family. Certain 
members of the family have been friendly to the 
American Mission; but in one of them, who 
adhered like a leach to the office of Under- 
secretary of the Ministry of Posts and Tele- 
graphs, we encountered one of the most tenacious 
opponents of reform. The Administration of 
Posts had been for some time directed by a Bel- 
gian, M. Camille Molitor, brother of Lambert, 



who was made the target of intrigues and propa- 
ganda and who, shortly before our arrival, was 
finally dismissed — ^mainly, it is said, through the 
efforts of the younger Mokhber ed Dowleh. The 
results of our struggles to control the finances of 
the Ministry of Posts and Telegraphs will be set 
forth in later chapters. 

All revenues derived from roads, railroads, 
mines, forests, fisheries, telephones, and miscel- 
laneous concessions and leases were under the ad- 
ministration of the Ministry of Public Works. 
These collections were in disorder; arrears had 
accumulated; and in general they were in as un- 
satisfactory a state as were the concessions, con- 
tracts, and leases on which they were based. 

The Shah left to the constitutional Government 
a legacy of farmans and concessions granting spe- 
cial privileges to Persians and foreigners. Nu- 
merous grants, many of which are of doubtful 
legality, were to prove embarrassing and compli- 
cating factors in the carrying out of plans for 
economic development. 

Other ministries, such as those of Foreign Af- 
fairs, Interior, Justice, and Public Instruction, 
also had revenues which were only partially re- 
ceived or collected by the Ministry of Finance. 

Some fifty thousand pensioners were on the 
pay-roll of the Government, requiring annually 
almost a million tomans. On our arrival, pen- 



sions had been some months in arrears, and flocks 
of pensioners gathered daily at the ministry and 
even around the automobile of the Prime Min- 

In the flscal year 1922-23, the year of our ar- 
rival, there was a deficit which, if complete 
accounts were at hand, would probably be found to 
approximate four million tomans or about twenty 
per cent, of the estimated revenues. The em- 
ployees of the Government were in arrears for 
several months. The result was general stagna- 
tion in the Civil Service, and in the case of 
revenue-collecting ofBcials, loss of revenue. The 
day after I took up my work at the Ministry of 
Finance, General Westdahl, the Swedish Director 
of Police, called on me, reporting that the police 
had gone on strike for their salaries and re- 
quested five thousand tomans. Claims against 
•the Government had accumulated and were sel- 
dom either definitely accepted or definitely re- 
jected. When a Persian claimant became too 
troublesome, he was given an order on a delin- 
quent taxpayer for the amount due him and was 
expected to collect the tax and pay himself. Al- 
though the claimant usually failed to collect, the 
claim and the tax were entered in the accounts as 

Lacking confidence in the treasury, which was 
too often empty, many of those to whom periodi- 



cal payments were due had succeeded in having 
their payments assigned to specified revenues, 
usually the customs. 

Prior to our arrival, the Customs Administra- 
tion had become in some respects a semi-independ- 
ent organization. It possessed a separate budget 
and it made its own payments directly from its 
receipts. It was also accustomed to make pay- 
ments on the order of the Minister of Finance; 
and the Government had also in various cases as- 
signed the customs revenues for the payment of 
certain recurrent expenses. Thus, the salaries, 
not only of the Belgian officials hut also of vari- 
ous foreign pensioners, were a special charge on 
the customs receipts. 

Money collected in the provinces was not re- 
mitted to the center. Accordingly, some of the 
claimants were satisfied, for the moment at least, 
with orders on provincial financial agencies. 
Many pensions were payable in the provinces. 

No regular procedure controlled the making of 
payments. The Minister of Finance sent orders 
of payment directly to the Treasurer and the min- 
ister signed the checks. When funds were not at 
hand, the pensioners were given pay-orders which 
they sold at a discount to speculators in the 
bazaars who were strong enough to bring political 
pressure successfully on the minister. There 
were standing orders to pay a fixed amount daily 



or monthly to pensioners and these orders re- 
mained in force, although no credits for the pay- 
ment had been voted by the Majless and in some 
cases the pensioner had died. Many such stand- 
ing orders had been purchased by others. 

There was no proper control over the purchas- 
ing of supplies. Each of the various ministers 
designated some employee as a supply officer and 
authorized him to supply the needs of his ministry 
at a fixed monthly price, which was paid to him 
regardless of the quantity or the value of the sup- 
plies that he had furnished. There was virtually 
no property-accounting of any kind. The credit 
of the country had fallen low. In general, the 
Government was able to purchase its supplies 
only for cash before delivery. 

Accounts were months or even years in arrears, 
and no budget was ever liquidated. No accounts 
‘were rendered for trust funds. Salaries were 
frequently paid in advance; and in many in- 
stances cash balances were carried, not as cash 
but in the form of the receipts of those to whom 
the cash had been advanced without authority. 

When the American Mission took up its work, 
we found that fundamental financial legislation 
had been enacted, much of it along sound lines. 
The Constitution provides that the approval of 
the Majless shall be necessary for the regulation 
of all financial matters, the preparation and exe- 



cution of the budget, the imposition of new taxes 
or the reduction of or exemption from existing 
taxes, the sale or transfer of any national re- 
source or property, the grant of concessions for 
the formation of any public company or associa- 
tion, the grant of commercial, industrial, agricul- 
tural, or other concessions, the contracting of 
loans, and the construction of railroads and high- 
ways. It is provided that the budget of each 
ministry shall be ready fifteen days before the 
end of the fiscal year. It is prescribed especially 
that the expenditures of the Court shall be de- 
termined by law and that the military expendi- 
tures shall be approved each year by the Majless. 
It is stipulated in the Constitution that no order 
for the payment of any allowance or gratuity can 
be made on the Treasury, save in accordance with 
law, and a Court of Accounts was foreseen, to ex- 
amine the accounts of the Government; and it is 
specially set forth that, except in such cases as 
are explicitly made an exception by law, nothing 
can under any pretext be demanded from the peo- 
ple except under the title of state, provincial, de- 
partmental, and municipal taxes. The General 
Accounting Law, a comprehensive statute passed 
by the Majless in 1289 (1910-11), prescribes in 
detail the budgetary procedure, and regulates the 
manner of making payments, the form of govern- 
ment accounting, the examination and settlement 



of the accounts, and the control of state property. 
This law had, apparently, never been properly 
enforced. There was another law determining 
the organization of the Ministry of Finance, 
which was considered by some to be in effect but 
which had been suspended at one time in order to 
give a free hand to a reform minister of finance. 
On account of that circumstance and the fact that 
it was a moot question whether the law had ever 
been revived after its suspension, we decided to 
disregard it. Had we been held to its prescrip- 
tions, we should have been greatly hampered in 
the reorganization of the ministry. 

In spite of the fact that adequate legal provi- 
sion for a budget had existed in Persia for twelve 
years, there was, strictly speaking, no budget un- 
til after the arrival of the American Mission. 
For the fiscal year 1922-23, the ministries had 
•submitted detailed budgets to the Majless, but 
these had not been voted in detail or observed 
by the Government in its expenditures. In the 
case of all the important branches of the Govern- 
ment, including certain administrations of the 
Ministry of Finance, expenditures greatly ex- 
ceeded the global credits which had been approved 
by the Majless. 

An important appanage of the Ministry of 
Finance was the Alimentation Service. On ac- 
count of transportation diflSculties, surplus wheat 



and barley may be rotting in the fields in one part 
of Persia, while six hundred miles away the popu- 
lation may be suffering from a bread famine. 
Such a famine at the close of the war compelled 
the Government to establish throughout Teheran 
and adjacent provinces a monopoly of grain, fix- 
ing the price of its purchase from the landowners 
and of its sale to the bakers, as well as the price 
of bread, assuming at the same time the control of 
grain transport and of the one hundred and fifty- 
nine bakeries of Teheran. The administration of 
this monopoly constituted one of the most re- 
sponsible and delicate duties of the Ministry of 
Finance. In the southern part of Teheran, there 
is a huge ambar or granary with a capacity of 
four hundred thousand bushels, where the grain is 
stored and cleaned and from which it is delivered 
to the bakers. The total receipts from wheat sold 
in Teheran amount to over two million tomans, 
and the total receipts of the Alimentation Service, 
from all sources, amount to almost three million 

Under this system of control, the Government is 
of course held responsible for the price of grain, 
as well as for the price and quality of bread. 
Those in charge of the administration of this 
service had to steer skilfully between the produc- 
ing Scylla and the consuming Charybdis. The 
administration brought the Government into vital 



business relations with influential classes of the 
population; and, since bread is the chief food of 
the majority of the people, it became — ^in the 
stalls of the bakers, in the barracks of the sol- 
diers and policemen, in the hands of laborers eat- 
ing at their work, and on the tables of the people 
generally — ^not merely a symbol of governmental 
efficiency but also an indication of the political at- 
titude of a government toward the people. This 
phase of government was, in more than one sense, 
every day in the mouths of the people. The con- 
duct of the Alimentation Service more than once 
seemed a matter of life and death. It was some- 
times a matter of life and death for cabinets, for 
it was well understood that bad bread or scarce 
bread might bring about the fall of a government. 
Before our arrival, the service had usually been 
operated at a loss ; and we found that it had been 
unable the previous year to repay the loan that 
had been made by the Imperial Bank of Persia 
for financing the purchase of grain. 

The Bank d’Escompte de Perse, which had been 
transferred by the Soviet Government to the Per- 
sian people, was at the time of our arrival in a 
state of liquidation, with no cash balance, but with 
some tangible property and intangible assets dif- 
ficult to realize but greatly exceeding its liabil- 

In presenting a summary of the conditions that 



existed in the financial administration on our ar- 
rival, it is possible that I shall create an impres- 
sion that Persians are inherently incapable of 
progress or of efficient administration, and that 
the improvements effected during the last three 
years are to be credited solely to the American 
Mission. Such an impression I wish to avoid. 
The American Mission has proved itself, in my 
opinion, an efficient instrument, a useful adjunct, 
an important stabilizing institution, an educative 
influence ; it has not been, and does not desire to 
be, a dictatorial power in Persia. The making of 
modern Persia should be, and I hope always will 
be, in the hands of the Persians. 

Moreover, the Persian financial picture, even as 
it was at the time of our arrival, has its brighter 
features and interpretative background. One of 
the most encouraging factors was that the Per- 
sians clearly recognized the existing evils as evils, 
and wanted these evils removed. In spite of the 
irresponsible practices of the Shahs and the pres- 
sure of foreign interests, the greater part of the 
economic resources of the country stiU remained 
at the disposal of the Persian people. The per- 
capita debt and the per-capita taxation were 
small; the currency, except for a certain amount 
of defective coins in circulation, was thoroughly 
sound; there, had been no inflation or deprecia- 
tion ; the assets and public services of the Govern- 



ment commanded respect. The country pos- 
sessed a banking system which, while not so 
competitive as the Persians wished, was sound, 
and had already given and was destined to give 
valuable assistance to the Government. The 
chairman of the Imperial Persian Bank at the 
annual meeting on December 28, 1922, made the 
following remarks : 

“Throughout the year, even during the change 
of the prime ministers, the Cossack leader, Beza 
Khan, has continued to hold the post of War Min- 
ister, and it is impossible not to admire the deter- 
mination and efficiency which this able oflScer has 
exhibited in the control of his department. He 
appears to have so reorganized the various armed 
units existing in the country that he has succeeded 
in providing Persia with quite a fairly strong and 
well-disciplined military force, and the success of 
his efforts is reflected in the increased tranquillity 
which has prevailed throughout the country. 
For example, to quote only our own experience, 
for the first time for seven years wo are able to 
record that not one of our branches has been 
closed during the year on account of disturbances, 
and you will notice that for the second year since 
the war we are able to hold our annual meeting in 
December, a result of the general improvement of 
communications which has followed the establish- 
ment of better order and security in the provinces, 



“Last year I alluded to the reported desire of 
the Persian Government to obtain once again the 
services of Mr. Morgan Shuster as their £nancial 
adviser. Mr. Shuster, I understand, was unable 
to return to Persia, but another American gentle- 
man, Dr. Millspaugh, was selected for this difficult 
post, and he arrived at Teheran with his staff a 
few weeks ago. This is an event of good augury 
for the country, if the Persian Government will 
invest him with the authority necessary for the 
successful exercise of strong financial control. 
Persia, like many other countries since the war, 
has found it difficult to balance its budget, but she 
has an industrious and thrifty population, her 
currency is in no way depreciated, and both the 
former financial advisers, Mr. Morgan Shuster 
and Mr. Armitage-Smith, formed the opinion that, 
if the system of taxation and the methods of col- 
lection were reformed and brought up to date, 
Persia should have no difficulty in paying her 
way. Neither of these gentlemen, unfortunately, 
was able to stay long enough to carry out their 
plans. We very sincerely hope that a more 
kindly fortune may attend the efforts of Mr. Mill- 
spaugh to put the financial administration oh a 
sound footing. We cordially welcome his ap- 
pointment, and it will be the duty and the priv- 
ilege of our officers in Persia to afford him all the 
assistance in their power.’* 



The psychological, social, economic, and politi- 
cal conditions of the country, — ^which I shall re- 
fer to more fully later, — ^when sympathetically 
viewed in their various relationships, did not ap- 
pear to present insuperable obstacles. Hope lay 
in the history of the people, in their proved re- 
cuperative powers. Progress, which had its 
roots deep in the sentiments of the people and its 
flowering in the Parliament, had already borne 
fruit before our arrival. The Constitution and 
the laws which had already been enacted, offered 
the legal foundation on which to build a solid 
financial and economic structure. Eeza Khan 
Pahlevi and his army contributed the authority, 
the force, and the leadership essential for the 
maintenance of unity and order, for the collection 
of the revenues, and for the carrying out of a 
sound economic program. 

The deputies of the fourth Majlcss, which was 
sitting at the time of our arrival, were sincerely 
desirous of reform along nationalistic lines; they 
realized that they had not succeeded yet in per- 
fecting parliamentary control of the finances; 
they took pains to inform me that the American 
Mission was the creature of the Parliament ; and 
they showed themselves willing to give coopera- 
tion and support. The young Persians quickly 
showed themselves intelligent and willing workers, 



amenable to leadership and keen to apply modem 

If the ground had not been thus prepared, and 
if we had not received cooperation from the Gov- 
ernment, the Majless, and the Persian finance em- 
ployees, our work would indeed have been difficult. 



I N any country, the psychology of the people 
and the working of their social and political 
institutions have a most important bearing 
on economic conditions and on the conduct of 
any particular administration. We had agreed 
in our contracts not to interfere in the religious or 
political affairs of Persia, and to have due regard 
for its laws. A conscientious adherence to the 
spirit of our contracts required that we should 
become acquainted as speedily and as fully as pos- 
sible with what constitutes the political affairs 
and the laws and customs of the country. It was 
necessary, above all, that we should grasp the feel- 
ings of the people, their habits of thought, their 
points of view, and the way in which they would 
be likely to react to any steps that we might take. 

I had been repeatedly warned in the United 
States that the Persians were an Oriental people 
and that Oriental “psychology” is quite different 
from ours, and almost impossible for a new-comer 
in the Orient to comprehend. I had been duly 
impressed with the alleged fact that “East is East 



and West is West, and never the twain shall 
meet. ” Having never heretofore had an occasion 
to deal with Orientals collectively, I anticipated 
that the Oriental mind, whatever it might be, 
would prove to be one of our most subtle prob- 
lems. I had visions of the Sphynx and of bronze 
Buddhas, accepted symbols of Eastern subtlety 
and immobility. One man who applied for a 
position on the American Mission offered as 
his outstanding qualification a special power to 
“interpret” the mind of the Oriental. Fortu- 
nately, we did not take him with us. 

Occidentals, for many reasons, are likely to 
believe, whether it is true or not, that the people 
of the Orient, including the Persians, possess in- 
nate and unchangeable traits of character that 
render the Occidental and the Oriental as anti- 
thetic as the two poles. A visitor to Persia, or 
probably to any other Oriental country, is in- 
stantly and deeply impressed with the strange- 
ness of things: the unintelligible language, the 
picturesque dress, the different habits and cus- 
toms, the multifarious peculiarities of the streets 
and bazaars, the primitive agriculture and handi- 
crafts, the absence of modern sanitation methods, 
the mosques, the muezzin, the veiled women, the 
camels, the donkeys, and the thousand and one 
other singularities which attract the traveler and 
enliven the pages of his book. Faced by such ap- 



pearances of almost incredible difference, one’s 
mind turns instinctively to contrasts rather than 
to comparisons. It is only after becoming accus- 
tomed to the new surroundings that one perceives 
and appreciates the points of likeness. The tribal 
instinct too, unless a conscious effort is made to 
correct it, gives form and color to many of our 
opinions and leads us to consider any foreigner 
as an “inferior.” Travelers and press corre- 
spondents in Persia, from whom we get much of 
our information, are naturally disposed to play 
up the strange and the sensational. Diplomats 
in Teheran, the spirit of whose despatches seeps 
through their foreign offices to the public, seem 
inclined to attribute to “Oriental” character the 
annoying delays and reversals, which, however, 
occur in negotiations in all capitals and should be 
particularly expected in a country where the' les- 
sons of diplomatic history point especially to the 
value of caution. The same may be said of the 
views of foreigners doing business in Persia. In- 
stead of denouncing their customers as “impos- 
sible,” they would do better to adapt their 
methods to their customers’ requirements and 
points of view. Absorption in administration, 
which is the lot of many foreigners in Persia, 
tends to bring evils into relief and to create feel- 
ings of antagonism. In my case, there seemed to 
be at first a deliberate conspiracy among the Per- 



sians themselves to blacken the reputation of 
their countrymen. When we arrived, almost 
every Persian with whom I talked, having had 
some disappointing experience or subjective in- 
terest, leveled a withering indictment at all Per- 
sians except himself. 

Nothing seems to me more useful, in reaching 
reasoned conclusions regarding a foreign people, 
than the mustering by the observer of as much 
judicial temperament and objectivity as possible, 
a sense of historical perspective, and a willing- 
ness to make comparisons. 

With regard to comparisons, it is unlikely, of 
course, that peoples unfold their histories in per- 
fect parallels any more than in recurring cycles. 
The complex phenomena of racial and national de- 
velopment in different countries are, probably, 
not subject to precise comparisons. I realize, 
moreover, the danger of premature conclusions 
and of generalizations from insufficient data. I 
can make no pretensions to ethnological knowl- 
edge, and I have had no special opportunity to 
observe the psychology, either individual or col- 
lective, of the Arab, Egyptian, Turk, Hindu, Chi- 
nese, or Japanese. It is possible that these other 
of the so-called Oriental peoples do possess, as 
compared with the American, British, or Conti- 
nental European, permanent and striking differ- 
ences in character. 



The multifarious and pressing demands of 
financial administration leave little time for any 
deliberate and well-planned excursion into the 
fascinating field of racial and social psychology. 
But these observations, which could not under the 
circumstances bo deliberate and well planned, 
have been by force of the same circumstances 
more or less inevitable as preparation for our 
work and by-products of it. 

The members of the American Mission have 
been at once the guests and the employees of the 
Persian people ; we have been under the necessity 
of selling our ideas to them, and we have had to 
win their consent in financial matters to our 
leadership. Our task has been, therefore, essen- 
tially human and personal, and it has been neces- 
sary for us to adapt our methods and ideas to the 
personalities and viewpoints of the people whom 
we were serving and striving to lead and among 
whom we were living. 

In this chapter, my intention, therefore, is 
merely to state some of the results of my own 
personal, incidental, and unscientific observations 
in a most fascinating field. If my tentative con- 
clusions seem erroneous or unacceptable to those 
who are better equipped than I to form conclu- 
sions, I shall still have been true to my purpose, 
which is only to set forth the acts and ideas with 
which the American Mission has proceeded to the 



doing of its task in Persia. Personal judgments, 
whether right or wrong, are a part of the story. 

Nevertheless, I feel that I have had, in the 
course of my work, an exceptional opportunity to 
become acquainted with the Persian people. 
From the beginning, I have had a constant suc- 
cession of calls to make and to receive. I have 
been in intimate contact with Persion officialdom, 
from the Shah and Prime Minister down to the 
least of the poor disponibles. I have become ac- 
quainted with most of the merchants and large 
proprietors. I receive every day a number of let- 
ters from Persians, some of them anonymous, 
many of them personal, most of them revealing. 

My calendar at the Ministry of Finance ordi- 
narily shows all my office hours taken by appoint- 
ments a week in advance. I have been criticized 
both for being inaccessible and for giving so much 
of my time to visitors. I have had thousands of 
talks with Persians, and almost all have contrib- 
uted in some way to my understanding of Persian 
character, but if I had seen all who wished to talk 
with me, I should have had no time left for the 
correspondence of the ministry. 

Judged by their original stock, the Persians 
are our first cousins. Persia has an admixture of 
various racial elements, but the core of the popu- 
lation is Aryan. An ancient inscription calls 
King Darius “an Aryan of Aryan race,” and 



“Iran” suggests its own derivation. The Per- 
sians are, as a race, dark, but there are many 
blonds among them. In physical appearance 
they are in general fine-looking, congenial speci- 
mens. Zoka ol Molk once laughingly told me how, 
after one of his speeches at Paris during the 
Peace Conference, a lady with the light of sur- 
prised discovery in her eyes, came to him ex- 
claiming, “Why, you are just like us! I thought 
you would be queer. ” 

A well-known banker of Boston invited Mr. 
Alai, when he was in this country, to address the 
financiers of that city. Before the luncheon, Mr. 
Alai’s sponsor was asked, “What kind of fellow 
is a Persian, anyway?” but after the luncheon 
those who had come to scoff or be bored or 
amused, remained willingly to listen during the 
better part of the afternoon, with respectful at- 
• tention, to a man whose face, dress, mind, and 
language made a captivating appeal to the best 
American business man. 

In my opinion, by far the most numerous of the 
special characteristics of the Persian people are 
products of their economic and social environ- 
ment. We have seen in America how in vari- 
ous sections of the country — due to hard living, 
the institution of slavery, climate, isolation, 
frontier conditions, or what not — certain defin- 
able and recognizable local types of personality 



and character have taken shape. It would not he 
surprising if the peculiar conditions — ^historical, 
geographical, topographical, climatic, economic, 
and social — which have existed in Persia should 
have developed certain special characteristics in 
the people. These special characteristics unques- 
tionably exist, but they partly or wholly disap- 
pear in the case of Persians who have lived dur- 
ing the formative periods of their lives in West- 
ern countries or have been educated abroad or in 
the American School at Teheran. One Persian 
differs in character from another precisely as 
Americans differ ; but apart from the superficiali- 
ties of dress and manner, they look, think, talk, 
and act like the rest of us. They are human 
beings, having their individual virtues and faults. 
They certainly are not, as a people, “inferior.” 

It is impossible to describe a whole people, as 
it is to indict them; but there are traits that are 
common among the Persians and which percep- 
tibly affect their political and economic function- 

Hospitality is the Persian trait which first im- 
presses itself on the sojourner in Persia. Fron- 
tier conditions exist and the population is scanty. 
Property is largely in land ; and wealth is neither 
liquid nor expendible as in the Western countries. 
Many of the forms of recreation and luxury 
that are available in the West— ^such as the 



opera, theater, restaurants, summer resorts, pro- 
fessional sports, sanitaria, country clubs, yachting, 
petting parties, or stock-exchange speculation — • 
are virtually non-existent in Persia. It is nat- 
ural, then, that wealth as it exists in Persia, 
should express itself in a leisured life, beautiful 
parks and houses, numerous servants, large fam- 
ilies, gorgeous rugs and ornamentations, an over- 
flowing table, fine horses, and unstinted hospital- 
ity. In Persia, as in other similar regions, the 
slowness and difficulties of transportation bring 
few visitors to one ’s house ; and the stranger who 
happens to stop is peculiarly appreciated. He is 
ushered into the house with the respectful salaams 
of the servants ; when he leaves, ho is escorted to 
the gate or even accompanied a part of the way by 
his host. A favorite expression of Persian wel- 
come is, “My house is your house.” 

In social matters, the Persian is punctilious and 
formal. In his language he has one form of ad- 
dress for inferiors, one for equals, and one for su- 
periors. He has careful regard for the rank of 
his guest. The question of precedence is one that 
Persians never overlook. 

The simple and in many respects wholesome 
manifestations of a social system rooted in an 
agricultural economy, are sometimes cited by for- 
eigners as proof of the Persians’ superficiality 
and inherent love of display. The same social 



characteristics, however, have appeared in other 
countries at a similar stage in their economic 
development, for example in the Southern States 
of America before the Civil War. Moreover, 
formality and preoccupation with matters of offi- 
cial precedence and personal prestige are by no 
means peculiar at the present time to Persia and 
the Persians. These manifestations are found in 
every capital, particularly in the diplomatic com- 
munity, and at Teheran foreigners in general at- 
tach quite as much importance to these matters as 
do the Persians. 

From what has been said, however, it must not 
be inferred that there is no democratic spirit in 
Persia. On the contrary, I should say that the 
Persians are essentially democratic. Among a 
people still living in an agricultural economy and 
just emerging from a monarchical and quasi- 
feudal regime, hierarchies, social gradations, and 
formalities are to be expected. On the other 
hand, there is no caste system in Persia ; the Con- 
stitution establishes universal suffrage and places 
all Persians equal before the law; the Prime Min- 
ister, some of the recent ministers, and one or 
two of the wealthiest and most influential mer- 
chants have risen from the humblest origins; 
others who were once powers in the conntry are 
now stripped of wealth, position, and influence; 
titles have been abolished by act of Parliament. 



Many of the institutions and customs which 
survive, although in appearance aristocratic, are 
in my opinion valuable as social brakes, prevent- 
ing a too-rapid growth of democracy. 

There are two qualities which are held by most 
foreign observers and even by the Persians them- 
selves to be rare in Persia, — energy and honesty. 
These are the qualities which are held in highest 
esteem by the Persians themselves; but, when 
found, are supposed to be seldom if ever found in 

As for energy, it is quite true the Persian im- 
presses one as slow, inactive, and procrastinating. 
He goes about his work leisurely, taking more in- 
tellectual interest in philosophy and poetry than 
in more practical subjects. He wastes much time 
in talk, particularly of politics ; and his conversa- 
tion concerns itself for the most part with persons 
or with points that seem irrelevant. He usually 
hesitates long before coming to a decision. One 
of the most common criticisms of the Persian offi- 
cial is that he appears to be unable or unwilling 
to decide any question whatever. The Persian 
participants in a conference on any subject are 
seldom those who urge action or press for an 
agreement. On the other hand, they often seem 
to welcome most the proposal which postpones the 
issue and settles nothing. 

Some time ago, a sketch in an American hu- 



morous weekly pictured the American as a devout 
worshiper of a metallic idol which he carries in 
his pocket or sets in front of him on his desk or 
mantel and to which he makes obeisance a hun- 
dred times a day. The Persian certainly is no 
slave of the clock or watch; he docs not worship 
Time. He apparently does not view life as a 
closely timed schedule. 

An observer in Persia sees on all sides the ap- 
pearance of idleness. The peasants go to the 
fields at nine or ten o’clock in the morning; the 
traders in the bazaars sit cross-legged in their 
stalls, languidly letting custom come to them; in 
almost every Persian home one can meet good- 
looking, well-dressed, educated young men who 
are doing nothing; in the tea-houses and caravan- 
saries and along the streets and roads are groups 
of Persians, lounging, talking, smoking, or playing 
cards ; on the sidewalks or by the side of the road, 
one frequently passes peasants or laborers lying 
on their faces in the hot sun, sleeping; whatever 
Persians may be doing, they never seem to be in 
a hurry; an official conference called for four 
o’clock will get down to work at five-thirty; the 
numerous holidays, the noonday siesta in the 
summer-time, the superfluous servants, as well 
as the familiar traits of indecision and procrasti- 
nation, all seem presumptive evidence of a lazy 



Nevertheless, one must look beneath the surface 
before pronouncing judgment. Some of these 
conditions are, as we have seen, the natural ac- 
companiments of an agricultural economy. The 
basic and predominant industry of Persia is ag- 
riculture. The transportation situation fixes a 
more or less definite limit to the expana.ion ot 
agricultural production ; and for the same reason 
the purchasing power of the population can ex- 
pand but slowly. There is lack of coordination 
between production and distribution. Popula- 
tion has all the time pressed on subsistence. The 
result is an unemployment situation so general, so 
chronic, and so familiar that it seems at first sight 
as natural and as characteristic a feature of the 
country as the landscape and the language. I am 
certain, however, that the wide-spread unemploy- 
ment and part-employment in Persia constitute 
for the most part an economic condition and not 
an inherent racial or personal defect. Introduce 
the stimulus, the opportunities, and the demands 
of industry, and much of the present idleness and 
apparent lethargy will disappear. Moreover, if 
we were fortunate enough to get accurate statis- 
tics and charitable enough to make comparisons, 
we should probably find that there is in Persia at 
present no more idleness proportionately than in 
the whole of western Europe at various times or 



in parts of western Europe at the present time, 
or in numerous villages in America. 

It is possible that from this serious and long- 
standing unemployment situation in Persia, there 
may have come a depressing and demoralizing in- 
fection, which has conceivably determined to some 
extent the habits and points of view of the people. 
In Persia, moreover, as in other countries, much 
apparent idleness springs from social stand- 
ards whether economically explainable or not. 
For example, a Persian disponible comes to my 
office seeking a job. He explains that he has a 
family of eleven; that he has been out of work 
seventeen months; that he has exhausted every 
resource ; that creditors are perching in flocks on 
his doorstep ; that even now he is selling his fur- 
niture to buy bread ; and that unless work is given 
him, he will be driven to suicide. He finishes his 
story by stating that, prior to his dismissal, he 
had served faithfully and honestly as a clerk, an 
inspector, and financial agent for almost sixteen 
years. Knowing of a vacant job carrying a 
salary of one hundred tomans a month, I offer it 
to him ; but my offer is promptly declined, for the 
reason that his last salary had been one hundred 
and twenty-five tomans and his pride would not 
permit him to accept what might be construed as 
a demotion. The above is a fairly accurate illus- 



tration of the family or individual pride exhibited 
by most Persians of the office-holding class, their 
curious sensitiveness to anything which might 
imperil prestige, which leads them, although they 
usually have no aversion whatever to work, to 
prefer unemployment rather than demotion or 
manual labor. 

Generally speaking, the Persians are by char- 
acter neither lazy, slow, nor sluggish. When cir- 
cumstances permit, they are not only intelligent 
but also quick, energetic, and industrious. 
When a Persian laborer is once put on a job, he 
works hard. The Persian employees in the finan- 
cial administration compare favorably in faithful- 
ness, devotion to duty, and steady application to 
their tasks, with the best government employees 
in any Western country. They have, naturally, 
much to learn of method, but of industriousness 
and ambition they show no lack. They willingly 
work overtime and forfeit their leaves of absence. 
The personnel of the new Persian Army is hard 
worked and strictly disciplined, but it reveals, so 
far as I can see, no inherent incapacity for sol- 
diering. In respect of hard work, as in other 
respects, the Persians are peculiarly amenable to 
leadership, example, and new demands; and they 
are already revealing what is in them, in re- 
sponse to the example of energy and hard work 
set by their Prime Minister, Reza Khan Pahlevi, 



who is himself, like many of the ministers and 
deputies, an easy refutation of the charge that all 
Persians are lazy. It is probable, also, that the 
hard work of the American Mission has aroused 
in many Persians, particularly the young men, a 
capacity for toil that was formerly latent; and 
it is certain that the new vision of a developed 
industrial Persia, with its obvious demands on 
the energies of men, is having its stimulating 

It is necessary to examine also, with some care, 
the current belief, held by Persians as well as by 
foreigners, that the Persians are generally dis- 
honest. The Standard Dictionary defines “hon- 
est” as “fair and candid in dealing with others; 
true, just; upright; trustworthy; . . . free from 
fraud; equitable; fair. Of respectable quality of 
appearance ; creditable ; unimpeached. Char- 
acterized by openness or sincerity, frank. . . . 
One who is honest in the ordinary sense acts or 
is always disposed to act with careful regard for 
the rights of others, especially in matters of busi- 
ness or property. . . . The honest man does not 
steal, cheat, or defraud. . . . One who is honest 
in the highest and fullest sense is scrupulously 
careful to adhere to all known truth and right 
even in thought.” The antonyms of honest are 
given by that authority as “deceitful, dishonest, 
disingenuous, faithless, false, fraudulent, hypo- 



critical, lying, mendacious, perfidious, traitorous, 
treacherous, unfaithful, unscrupulous, untrue." 
To these antonyms might be added, with special 
reference to public honesty, such concepts as self- 
ish, unpatriotic, unsocial; for the individual’s con- 
ception of his duty to society and to the State has 
much to do in determining his thought and con-; 
duct in public matters and his relations with his 
Government. Judged by such exacting defini- 
tions, most Persians and, for that matter, most 
Americans and Europeans, would probably be 
found wanting. 

The standards of morality are of course rela- 
tive. What may seem immoral to an American 
will be moral to another nationality; what seems 
immoral to a Persian may be moral to an Ameri- 
can. We can make no progress in understanding 
the Persian, or in working with him, if we ignore 
his own moral standards, as well as the social and 
economic conditions that determine his conduct, 
and if we persist in judging him by the exacting 
absolute standards of the West, by which the 
Westerner himself is often weighed and found 

Because of my paucity of information on those 
points, I do not wish to concern myself here with 
the private honesty of the Persians, or even, to 
any extent, with their commercial honesty. With 
regard to the latter C. J. Wills is quoted in the 



Encyclopaedia Britannica as saying; “In com- 
mercial morality, a Persian merchant will 
compare not unfavorably with the European 

In the mind of the average Persian, the sense of 
patriotism and of social responsibility is rudi- 
mentary. In the past, he has belonged to a family 
or a tribe which has seemed to him an almost com- 
plete and self-sufficient social and economic or- 
ganization. He tends instinctively, therefore, to 
give his allegiance to his family, tribe, or com- 
munity, rather than to the State. This partic- 
ularistic state of mind was a marked accompani- 
ment of European feudalism, and existed very 
recently in Japan. The Persian loyalty to family 
is no more immoral than the choice made by 
Robert E. Lee when he decided to serve Virginia 
against the United States. Even in America to- 
day, the sense of loyalty to a city or to a family 
leads often to a mode of thought and action which, 
judged broadly and objectively, cannot be char- 
acterized as “fair,” “candid,” “free from 
fraud,” or “characterized by openness and sin- 
cerity.” An American booster who is engaged in 
the praiseworthy task of “selling” his home town, 
is frequently a liar, albeit his consciousness of 
“public spirit” smothers any scruples that might 
otherwise assert themselves. 

When a Persian comes to the Ministry of 


Finance, as thousands do in the course of a year, 
with some special business, — ^for example, a mon- 
etary claim, a request for the appointment of a 
brother, a son, or a nephew, a petition for tax- 
exemption, — ^too much in the way of candor should 
not be expected of him. He will ask for favor- 
itism ; he is a special pleader for his family or for 
his own interests ; he will suppress some facts and 
will give to others a favorable tinge. 

But those who think they can' get things from 
governments, act in the same way the world over. 
I am inclined, therefore, in considering the matter 
of honesty, to dismiss summarily from considera- 
tion all of those acts, short of outright bribery 
and stealing, which occur in the course of their 
business dealings with the Government. 

Moreover, acts that have the appearance of dis- 
honesty in Persia are often traceable to inac-; 
curacy. The Persians lack the training in precise 
statement that modern science and industry have 
given to "Westerners. Other acts spring from 
sheer politeness. When a Persian says that the 
road is good when it is really atrocious, or that 
it is eight farsdkhs to Kazvin when it is really 
twelve, he is not lying; he is merely being polite 
and pleasant to a stranger. He is no more culp- 
able than an Occidental who is virtually never 
truthful in his comments to you on your personal 



It should be kept in mind that, in addition to the 
family conception of social organization, the Per- 
sians have never enjoyed those influences on their 
standards of honesty which flow from a highly de- 
veloped political system resting on the establish- 
ment and strict enforcement of law or from 
modern industry with its corporate organization 
and its exacting human and financial require- 

In a previous chapter, I referred to the corrupt 
conditions that existed in the financial administra- 
tion before the arrival of the American Mission, 
and it is unnecessary here to describe the myriad 
and ingenious forms which were assumed by 
public fiscal corruption. In attacking these con- 
ditions, we have acted on the opinion that they 
should properly be attributed to political and ad- 
ministrative immaturity rather than to any in- 
herent defects in Persian character. When laws 
were not enforced or did not exist, when ministers 
were compelled to buy their tenure of office with 
administrative favors, when public conscience 
and patriotism were just taking form, when the 
salaries of employees handling public money were 
below a living wage, when those having political 
influence were at the same time the largest tax- 
payers and the largest claimants, when the Gov- 
ernment had been under pressure from foreign 
interests or thrown into chaos by war, when, 



it is regrettable to have to add, foreigners repre- 
senting Western governments and Western pri- 
vate interests had not always offered examples 
and incentives to honest conduct — ^it is not sur- 
prising that corruption should have appeared in 
Persia, as it has appeared in other countries. 

The Persian custom of giving and receiving 
presents is primarily an accompaniment or ex- 
pression of hospitality. The members of the 
American Mission have been offered many pres- 
ents. Although it is impossible to judge motives 
which are, from the nature of the case, unex- 
pressed, I feel sure that few of these offers have 
been tainted with any idea of bribery. It is some- 
times difficult to decline a gift without seeming 
discourteous, but the American Mission is at- 
tempting, as far as its power extends, to assist in 
eliminating from Persian politics the fact and the 
appearance of bribery. We have wished to im- 
press on the Persians that a high-minded public 
official expects nothing as incentive or reward ex- 
cept his legal compensation and the satisfactions 
of service. 

Before casting the first stone at the Persians, 
it may be chastening to recall that only two hun- 
dred years ago, Walpole, surveying Parliament, 
is said to have remarked, “All of these men have 
their price”; that only a few years ago America 
was shocked by “corrupt and contented Phila- 



delphia" and by the “ shame ” of other cities; 
that at the present time, measured not by the high' 
est but by the ordinary practical standards, there 
is wide-spread dishonesty among Western peoples, 
including some public scandals implicating gov- 
ernment officials. 

It is true that the American Mission, engaged 
in a work of reform and upholding honest admin- 
istration, has met with opposition in Persia, but 
I am convinced that a large majority of Persians 
have been with us and have favored reform. In 
any event, political opposition to reform, and 
popular lethargy in the support of reform, are 
not peculiar to Persia. Tammany, crushed to 
earth, has often risen again; and General Butler 
would probably have found as smooth sailing in 
Teheran as in Philadelphia. 

The Persian is highly intelligent, resourceful, 
and quick-witted, although in view of the condi- 
tions that surround him he has not yet developed 
constructive ability or the business acumen which 
comes by experience. Temperamentally emo- 
tional, he seldom acts on impulse in important 
matters. He is essentially more conservative 
than the average American, and less likely to be 
changeable in important matters. 

Persia needs, of course, the quickening and 
tonic influence of education and recreation. 

The educational institutions and influences of 


the country are at present pathetically inade- 
quate. According to statistics prepared a few 
weeks ago, Persia has at present 248 Government- 
supported schools, four municipal schools, 237 
private schools receiving government subsidies, 
107 independent schools, 47 foreign schools, ex- 
cepting the American, 225 religious schools, and 
983 private classes. In these schools, which total 
1851, are enrolled as students 73,998 boys and 17,- 
192 girls, a total of 91,190, of which 22,660 were 
in Teheran. The total number of teachers is 
given as 5142, and the total population of the 
cities and towns in which schools are located is re- 
ported to be two million. The American Presby- 
terian Mission in Persia maintains 31 schools, of 
which the institution at Teheran enrolls 670 stu- 
dents, 500 of college grade. The graduates of this 
school show the etfects not only of mental disci- 
pline but also of character-training, and are living 
examples of the acceleration that education gives 
to progress. Many young Persians have been edu- 
cated abroad, and many more long to be. I am 
told that there are at least forty Persian boys 
who want to come to America for a college educa- 
tion and who might come if the American Im- 
migration Law did not, as it is said to do, pre- 
vent a foreign student from working his way 
through college. There are in Persia no public 
libraries worthy the name; the writing and pub- 



lishing of books in the Persian language is a rare 
occurrence; and the Persian press, while improv- 
ing, is still far from being an educative influence. 
Hope lies, however, in the universal desire of 
Persians to extend their educational system and 
in the measures that are being taken to this end. 

The development in Persia of a keener and 
wider interest in physical exercise, recreation, 
and outdoor sports will contribute to the creation 
of a more salutary conception of honor and of 
conduct — the sense of fair play, the habit of team- 
work, self-mastery, perseverance, and confidence. 
It is interesting to note that the game of polo, 
which originated in Persia, is now played there 
mainly by foreigners. There seems to be no 
reason, however, why Persians should not do 
well in sports, and there is apparent now among 
the young men a renewed interest in physical 
exercise and athletic contests. Setting-up exer- 
cises are a regular feature of the Persian 
soldier’s day. Football is played every after- 
noon by Persian boys on the vacant lots near 
Mokhber ed Dowleh Park. 

Music, too, is gaining its proper place in the 
life of the capital. A Persian musical club gives 
concerts weekly to its members and their friends, 
and band concerts take place almost daily on the 
public squares. 

Judged by Western standards, sanitation in 


Persia is far from satisfactory; but, from the 
standpoint of the physical health of the average 
individual, health conditions in that country do 
not appear unfavorable to the development of 
mind and character. 




T he Persians are politically minded. Their 
geographical situation and history ren- 
der international politics a subject of 
direct and practical interest to them. In spite 
of anything that they can now do or probably 
ever could do, they are entangled in interna- 
tional affairs ; and at times in the past they have 
come dangerously close to being strangled by the 
meshes of the net that circumstances had cast 
around them. Domestic politics, likewise, are to 
the Persians a pot that never ceases to boil. 

The Persians do not want their foreign admin- 
istrators to interfere in Persian politics. Three 
years ago, the Majless passed a law to the effect 
that every contract for the employment of a 
foreigner should contain a clause prohibiting 
him from interfering in political matters; and, 
in compliance with the spirit of this clause, the 
members of the Am erican Mission have care- 
fully refrained from the exercise of influence in 
the election of deputies, the appointment of 
ministers, diplomatic negotiations on political 



subjects, or any other action of the Government 
not relating to a financial or economic matter. 
On the other hand, certain clauses of my contract 
leave me free and even make it my duty to par- 
ticipate with Persian officials in diplomatic nego- 
tiations on financial and economic subjects, and 
of course I am expected to work in a non- 
partisan way for the passage in the Majless of 
financial and economic legislation. It has also, 
naturally, been my desire that the American 
Mission, through the example and effect of its 
presence and work, should contribute to the uni- 
fication and stabilization of Persia and to its 
development as an independent self-governing 

I went to Persia free of political prejudices 
and with the firm resolve to be neutral in all 
purely political matters. I realized quite well 
that Great Britain and Russia were the two 
countries with which Persia shared, and would 
very likely continue to share, the most immediate 
and difficult international questions. Toward 
both of those countries, I had, like most Ameri- 
cans, a feeling in general of respect and friendli- 
ness ; and as an official of the Persian Government, 
it was neither my inclination nor my intention to 
exert any influence or take any action which would 
discriminate against one of those countries in 
favor of the other, or that might prejudice any 



legal right possessed by either country in Persia. 
On the other hand, it was certain that the Persian 
Government did not wish the American Mission 
to become the tool of any foreign legation in 
Teheran, or to hesitate in opposing the economic 
or financial proposals of any legation when such 
proposals seemed to us to be contrary to the 
interests of Persia. 

With regard to Persian domestic politics, my 
mind was similarly open and unprejudiced. Al- 
though I am a citizen of a republic, my excursions 
in political science had given me catholicity re- 
garding forms of government, and it seemed to 
me that a people could realize its democratic as- 
pirations and develop its potentialities quite as 
well under a constitutional monarchy as under a 
republican form of government. 

The political problems of Persia are of such 
surpassing difiiculty that they should, in my opin- 
ion, enlist the sympathy and aid of other coun- 
tries. Persia is not only a buffer state, having 
already felt the impact of external forces, but 
it is also an undeveloped exploitable country 
which has experienced the operations of modern 
systems of economic penetration. Immature 
politically and economically, Persia has suddenly 
awakened to find itself faced with the demands 
of an industrial world impatient of ineflSciency. 
Tenacious of its sovereignty, Persia must work 



out its problem of self-government, difficult of 
solution in any country, while unifying its popu- 
lation, educating its people, and developing its 
economic possibilities. 

When, about 1890, foreign efforts to obtain 
economic privileges in Persia "became significant, 
the Persian Government of that time — ^irrespon- 
sible, opportunistic, and corrupt — endeavored to 
keep a balance between the two competing pow- 
ers and to play off one against the other. As 
early as 1900, the Shah embarked on a policy of 
borrowing from British and Russian sources, 
mainly to make up the deficit caused by his ex- 
travagance and by the corrupt and inefficient ad- 
ministration of Persian finances. Finally, as a 
part of their general rapprochement. Great Brit- 
ain and Russia signed in 1907 an agreement in 
which, after mutually engaging to respect t^ie 
integrity and independence of Persia and stating 
that they were “sincerely desiring the preserva- 
tion of order throughout that country and its 
peaceful development, as well as the permanent 
establishment of equal advantages for the trade 
and industry of all other nations,” Great Britain 
agreed not to seek any concessions north of a line 
passing from Kasr-Chirin, through Isfahan, Tezd 
and Kakhk, to the intersection of the Russo- 
Afghan frontier, and Russia agreed not to seek 
concessions south of a line extending from the 



Afghan frontier through Gazik, Birjand, and 
Kerman, to Bandar Abbass. The Anglo-Bussian 
Agreement was signed without the knowledge or 
consent of the Persian Government.* Four years 
later Shuster was employed by the Persian Gov- 
ernment. Proceeding energetically to the accom- 
plishment of his task, he soon met with the 
protests and opposition of the Russian Govern- 
ment, which alleged that the Treasurer-General 
did not in his official acts sufficiently recognize 
and respect the special interests of Russia in the 
north. After a few months, the Russian Govern- 
ment presented an ultimatum to the Persian 
Government, demanding the dismissal of Shuster, 
and he departed from Persia, followed by his 
staff, early in 1912, leaving behind him a tradi- 
tion which is still strong in the minds of Persian 
young men, of disinterested and courageous 
friendship for the Persian people. 

The Anglo-Russian Agreement of 1907 was an- 
nulled during the World War ; but in 1914 Persia 
was without means to maintain the neutrality 
which it had proclaimed. Within a year, Rus- 
sian, Turkish, and British armies were fighting on 
Persian soil, and German agents were conduct- 
ing a wide-spread propaganda. There were ac- 
tive fighting, plots, murders, and disorder 

1 For the full text of the Anglo-Russian Agreement of 1907, 
see Shuster, Strangling of Persia, Introduction, p. xxiv. 



throughout the whole country. Western Persia 
in 1918 was in a state of famine. The trade of 
■Persia came almost to a standstill, and the Gov- 
ernment was unable to collect its internal taxes. 
Subsidies and other advances were supplied by 
the British. The distinguished and able delega- 
tion which Persia sent to Paris in 1919 was -not 
permitted to state its ease to the Peace Confer- 
ence, and no action was taken by the conference 
toward rendering assistance to Persia. 

In August, 1919, an agreement was concluded 
between the British minister at Teheren and the 
Persian B\)reign Office. In this agreement, the 
British Government agreed “to respect abso- 
lutely the independence and integrity of Persia,” 
to supply at Persian expense “the services of 
whatever expert advisers may, after consultation 
between the two Governments, be considered ne- 
cessary for the several dejjartments of the Per- 
sian Administration,” these advisers to be 
“engaged on contracts and endowed with ade- 
quate powers, the nature of which shall be the 
matter of agreement between the Persian Gov- 
ernment and the advisers.” The agreement also 
aimed at the supplying by the British Government 
of officers, munitions, and equipment, with a view 
to the creation of a uniform force for the estab- 
lishment and preservation of order. The British 
Government also agreed to supply a loan and to 



provide at once certain funds on account of it. 
The agreement further provided for cooperation 
between the British and Persian Governments for 
the improvement of communications in the coun- 
try through railway construction and other means 
of transport. Finally, it was agreed that a joint 
commission of experts should revise the Persian 
customs tariff “to accord with the legitimate in- 
terests of the country and to promote its pros- 
perity.”^ Under the terms of the agreement, 
payments were advanced for several months to 
the Persian Government; Mr. Armitage-Smith, a 
British Treasury official, came to Persia as Finan- 
cial Adviser with a staff of British assistants, 
and military and naval missions were also sent. 
When the Majlcss met, it refused to ratify the 
agreement; the measures which were being exe- 
cuted under its terms were discontinued; and 
Mr. Armitage-Smith departed, having been un- 
able during his stay to obtain and exercise any 
real powers. The British proceeded with the 
withdrawal of their troops from Persia, and when 
I arrived at Teheran, discussions were in prog- 
ress which resulted in the transfer to the Per- 
sian Government of the post-offices on the Persian 
Gulf, which had been administered by the British. 

With regard , to the present policy of the Brit- 

I For the text of the Anglo-Persian Agreement, see U. S. Senate 
Document No. 90, 66th Congress, Ist Session. 



ish Government toward Persia and the American 
Mission, light may be gathered from a speech 
by the Earl of Balfour in the House of Lords 
on May 19, 1925, in which ho is reported by the 
London ‘‘Times’’ to have said that 

such information as he had, indicated that Persian fi- 
nances were in a more favourable condition than were 
those of many more powerful States. Persia had practi- 
cally made her Budget meet. The position was in no 
small measure due to the efforts of the American finan- 
cial advisers whom Persia had called in to her councils. 
He had not the least doubt that there had been friction, 
but those who gave good advice about money were not al- 
ways the most popular with those to whom the advice 
was given. [Laughter.] The most friendly relations 
had always existed between this country and the Sheik 
of Mohammerah. The Sheik had not been treated by 
us as a Prince. He had always been under the suzer- 
ainty of Persia. With regard to the future movements 
of the Shah, whom rumour represented as now enjoying 
himself on the Riviera, he had no official information. 
He was not disposed to think that it would be either 
expedient or decorous to ask what the intentions of that 
potentate might be. Negotiations had taken place last 
year between various great oil companies, but no settle- 
ment had been arrived at. He had no recent official in- 
formation on the subject. The Anglo-Persian agreement 
was now ancient history, — ^indeed, obsolete history, — 
and there was little use in reviving that controversy 
now. Nor did he think there was much substance in 

. 116 


some of the American criticism in which some American 
critics seem to think that England was behaving or de- 
sired to behave in a manner toward Persia which would 
interfere with the independence of that country. Those 
critics might be deserving of respect, but they were 
clearly very ill-informed on the subject of Persia and 
on the subject of British intentions in regard to that 
country. The present Government had, and all British 
Governments had had, one policy in view. We desired 
to see a Persia which was independent, which was free, 
and which we could treat as a neighbour on equal terms 
and whose efficiency, civilization, and power we justly 
regarded as security for the general position in the East 
so far as our own interests were concerned. That view 
is still maintained. We desired the independence of 
Persia, we desired the prosperity of Persia, and we re- 
joiced that its independence was secure and its prosperity 
was increasing. 

As Persia has in the past often swung, in her 
foreign Policy, from Russia to Britain and from 
Britain to Russia, I shall let George Tchitcherin 
state the chronology of one of the latest oscilla- 
tions : 

In the meanwhile, the Anglophile Sepahdar set Feb- 
ruary 20, 1921, as the date for the opening of the Par- 
liament to ratify the Anglo-Persian agreement, and on 
this date the Parliament was opened. On February 21, 
Teheran was occupied by the Persian Cossacks of Bcza 
Ehan and the members of the government of Sepahdar 
were arrested. The new cabinet of Zia-Ed-Din, pub- 



lished the declaration of February 26, in which it an- 
nounced the annulment of the Anglo-Persian Agreement 
and outlined a broad plan of Internal reforms. On that 
same day, February 26, in Moscow was signed the 
Russian-Persian Agreement, which radically and defi- 
nitely liquidated all of the traces of the former Tsarist 
policy of oppression in Persia and laid the foundation 
for a close fraternal relation between the peoples of 
Russia and Persia.* 

In the treaty of February 26,' 1921, between the 
Soviet and Persian Governments, the Soviet Gov- 
ernment in Article One, declared its “immutable 
renunciation of the policy of force with regard to 
Persia pursued by the Imperialist Governments 
of Eussia,” and, “wishing to see the Persian peo- 
ple independent, flourishing, and freely control- 
ling the whole of its own possessions,” the Soviet 
Government declared “all treaties, conventions 
and agreements concluded by the late Czarist 
Government with Persia and tending to the dimi- 
nution of the rights of the Persian people com- 
pletely null and void.” In Article Two of this 
treaty, the Soviet Govermnent further branded 
“as criminal the policy of the Government of 
Czarist Eussia, which, without the agreement of 
the peoples of Asia and under the guise of as- 
suring the independence of these peoples, con- 
cluded with other states of Europe treaties con- 

1 George Tchitcherin in “Izvestia” of Nov. 6, 1921. 



cerning the East which had for their ultimate ob- 
ject its gradual seizure”; the Soviet Government 
unconditionally rejected “that criminal policy 
as not only violating the sovereignty of the states 
of Asia but also leading to the organized brutal 
violence of European robbers on the living body 
of the peoples of the East”; and, therefore, the 
Soviet Government declared “its refusal to take 
part in any measures whatsoever tending to 
weaken or violate the sovereignty of Persia,” 
and declared “completely null and void all con- 
ventions and agreements concluded by the late 
Government of Russia with third powers for the 
harm of Persia and concerning her.” In Article 
Four, each of the contracting parties agreed to 
“strictly refrain from interference in the internal 
affairs of the other party.” In Article Eight, the 
Soviet Government declared “its complete rejec- 
tion of that financial policy which the Czarist 
Government of Russia pursued in the East, sup- 
plying the Government of Persia with financial 
means, not in order to assist the economic de- 
velopment and flourishing of the Persian people, 
but in the form of the political enfetterment of 
Persia.” The Soviet Government, therefore, re- 
signed “all rights to the loans furnished to Persia 
by the Czarist Government” and declared “such 
loans null and not to be repaid,” similarly resign- 
ing “all demands for the use of those state rev- 



enues of Persia by which the loans were guar- 
anteed,” In Article Nine, the Soviet Govern- 
ment, “in accordance with its expressed condem- 
nation of the colonial policy of capitalism, which 
served and is serving as a reason for innumerable 
miseries and shedding of blood,” renounced “the 
use of those financial undertakings of Czarist 
Russia which had as their object the economical 
enfetterment of Persia,” and handed over “into 
the complete possession of the Persian people, the 
financial sums, valuables, and in general the as- 
sets and liabilities of the Discount Bank of Persia, 
together with the movable and immovable prop- 
erty of the Bank within the territory of Persia. ’ ’ 
In Article Ten, repudiating “the tendency of 
world imperialism which strives to build in for- 
eign countries roads and telegraph lines, not so 
much for the cultural development of the people 
as. for insuring to itself the means of military 
penetration,” “wishing to provide the Persian 
people with the possibility of the free disposal of 
the means of communication and correspondence, 
vitally necessary for the independence and cul- 
tural development of the people, and further, as 
far as it can to compensate Persia for the losses 
caused her by the troops of the Czarist Govern- 
ment,” the Soviet Government gratuitously trans- 
ferred, “as the absolute property of the Persian 
people,” the following Russian establishments in 



Persia : the highways from Enzeli to Teheran and 
from Kazvin to Hamadan, the railways from 
Djulfa to Tabriz and from Sofian to Lake Uru- 
miah, all properties pertaining to navigation on 
Lake Urumiah, all telegraph and telephone lines 
constructed by the Russian Government in Persia, 
and the port of Enzeli, with its goods, stores, elec- 
tric power station, and other buildings. In 
Article Eleven, the two contracting parties agreed 
that each “shall enjoy the right of free naviga- 
tion on the Caspian Sea under its own flag.” 

In addition to the above renunciations and 
transfers, which appear to have special reference 
to the acquired rights of the former Russian Gov- 
ernment itself, the Soviet Government, in Article 
Twelve of the treaty, after “solemnly renouncing 
the enjoyment of economic privileges based on 
military predominance” declared “null and void 
also all other concessions, beside those enumer- 
ated in Articles Nine and Ten, forced from the 
Government of Persia by the late Czarist Govern- 
ment for itself and its subjects,” and the Soviet 
Government returned to the Persian Government 
all such concessions. The Persian Government on 
its part promised in Article Thirteen not to hand 
over any of the renounced or transferred conces- 
sions to any third state or its citizens but to pre- 
serve those rights to itself for the good of the 
Persian people. Finally, in Article Sixteen of 



the treaty, the Soviet Government confirmed the 
abolition of the extra-territorial rights which had 
up to June 26, 1919, been enjoyed by Russian citi- 
zens in Persia, placing Russian citizens in Persia 
henceforth on an equality with Persian citizens, 
subject to the same laws and amenable to the same 
courts of justice.^ 

I have made no attempt to give an abstract of 
the whole of this remarkable document ; and with 
regard to its execution, it will be sufficient to say 
that the concessions and properties referred to in 
the treaty, with the exception of some of those 
relating to the port of Enzeli,^ some minor ap- 
purtenances of the former Russian Bank, and 
parts of the fishery concession, were duly trans- 
ferred. In quoting portions of this treaty, it has 
been my purpose to set forth in substance the most 
formal and authoritative declaration of post-war 
Russian policy toward Persia. After reading the 
document, one can scarcely be surprised that the 
other party to the treaty should have felt a new 
sense of security with regard to its northern fron- 
tier, and that, without leaning toward Bolshevism, 
it should have given again its confidence and 
friendship to its northern neighbor. 

Addressing the Executive Committee on the re- 

1 The quotations are from the English translation of the treaty 
published in the ''Manchester Guardian” of Mch. 31, 1921. 

2 This port has been re-named Pahlcvi, in honor of the Prime 



lations of the Soviet Republics with Eastern coun- 
tries, Mr. Tchitcherin, Foreign Commissaire, is 
reported to have made, early in March, 1925, the 
following statement about Soviet relations with 
Persia : 

Our friendly relations with Persia are being strength- 
ened more than ever before. The Soviet Government 
is endeavoring to assist Persia to stand on her own feet 
and develop her national reproductive forces, while the 
Czarist Government tried to prevent the growth of 
these forces. The maintenance of friendly relations 
with the Union of Sovietic Republics is useful to Persia 
in this respect, that in her struggles to bring about re- 
forms and reestablish her complete political and economic 
independence, Persia can feel sure of her back.^ 

It would not be appropriate for me to express 
any opinion regarding what I might conceive to 
bo the real, as compared with the declared, .policy 
of a foreign government toward Persia, or regard- 
ing the motives which might impel the declared 
or real policy. I have referred in a preceding 
chapter to the negotiations .with the Russian 
Government relative to the taritf, and it will be 
my duty later to set forth the facts concerning 
the fishery question, which may he found an 
interesting touch-stone of Soviet policy. The 

1 Translated into English from the Persian newspaper "Iran’^ 
of Mch. 8, 1925, and credited by that newspaper to the '‘Moseow 
Wireless,” published by the Soviet Legation at Teheran. 



reader, however, will be left to draw his own 

It is interesting and significant that in discus- 
sions of international politics in Persia, the juxta- 
position of British and Russian interests is almost 
invariably premised. If the British Legation 
favors a thing, it is ipso facto inferred that .the 
Russian Legation is opposed to it, or vice versa. 
British and Russian interests are generally con- 
sidered in Persia to be as fundamentally opposed, 
at least so far as Persia is concerned, as were 
those of Rome and Carthage. It is of little use 
to examine the question whether the opposition 
of the interests of these two powers in Persia may 
or may not be real and permanent, or whether the 
resolving of their conflicting interests — ^if they do 
really conflict and if they are ever resolved — ^may 
or may not spell the doom of an independent 
Persia. The fact is that Persians remember the 
years, after 1890, when Persia was the inglorious 
arena of a politico-economic duel — sordid years 
of concessions to one power and “compensations” 
to the other, years of harassment, demoralization, 
and attrition. During those years, the Persians 
who were in power — ^partly because of their cor- 
ruption and incompetence, but largely, I believe, 
because of the weakness of their country — ^bar- 
tered with two countries instead of adopting and 
applying to all countries a sound patriotic policy 



based on Persia’s interests rather than on her 
fears. It is a compliment to Persia that, when the 
chance came, she adopted and is attempting to 
carry out a policy nothing less in principle than 
the familiar doctrine of the “open door.’’ It is 
perhaps no less complimentary to the foreign gov- 
ernments which have been chiefly concerned with 
Persia that, when they were brought after the 
World War to the necessity of readjustments, 
they should have proclaimed policies with regard 
to Persia that are, if we accept them at their face- 
value, compatible with the existence of Persia 
as a politically and economically sovereign nation, 
and are equally compatible with the legitimate 
interests of those governments and their nationals 
in Persia. 

In addition to securing its international posi- 
tion, Persia must, in order to be a nation, develop 
internal homogeneity and unity. 

The bulk of the population of the country is of 
Aryan stock, but some admixture of other racial 
elements has taken place, particularly in the fron- 
tier provinces. 

The chief internal obstacles to national unity 
have been the strong tribes — ^the Shahsevans and 
Kurds in the northwest, the Bakhtiaris in the 
southwest, the Khashgais in the south, the Balu- 
chis in the southeast, and the Turkomans in the 
northeast — and the semi-independent position of 



Sardar Aghdass or Sheikh Khaz’al, the Sheikh of 
Mohammerah, at the head of the Persian Gulf. 
A strong army was created through the organiz- 
ing ability and leadership of Beza Khan Pahlevi, 
and before the arrival of the American Mission, 
he had subjugated and disarmed the recalcitrant 
Kurds of Azerbaidjan. In 1924, he extended .the 
power of the Central Government to Khozistan. 
In 1925, the Bakhtiaris and Khashgais were being 
disarmed, and the Turkomans were receiving a 
quick and effective lesson in authority. Persia 
is becoming a nation. Beza Khan belongs, in 
many respects, to the class of statesmen of which 
Henry II of England and Philip Augustus of 
France were the prototypes. He has supplied the 
personal and military force which are necessary 
to establish the authority of the Central Govern- 
ment. A tribal uprising in Persia is no proof of 
incapacity for self-government. The country is 
in a well-advanced state of transition from sep- 
aratism to nationalism, and occasional growing 
pains are to be expected. As a matter of fact. 
Great Britain, France, Germany, and Italy like- 
wise had their periods of transition and unifica- 
tion ; and even the United States, within the mem- 
ory of men now living, went through a sanguinary 
War before it attained national solidarity. 

The Persian language, with its Arabic acquisi- 
tions, is spoken over nearly the whole of the coun- 



try, the purest Persian being heard in the Prov- 
ince of Pars and in Teheran. Throughout the 
country there are various spoken dialects of Pah- 
levi, Kurdi, Turki, Luri, Baluchi, and others that 
change almost from village to village. A common 
language makes for national unity; and Persian 
nationalism has shown its pride of language. In 
November, 1924, a commission was organized by 
order of the Prime Minister to find Persian words 
to replace words of alien origin which were in 
use in the army ; and on March 30, 1925, the Maj- 
less passed a law establishing a new calendar in 
which Persian names for the months were substi- 
tuted for Arabic. 

In religion, Persia is virtually homogeneous. 
The prevailing and official religion is that of the 
Shiah branch of Islam. Inhabitants and resi- 
dents of other religions, however, such as Parsees, 
Jews, and Christians, enjoy freedom of worship 
and do not constitute a discordant or unsettling 
element in the population. 

Throughout the territory of Persia, there is a 
single historical tradition. Persia is not attempt- 
ing to absorb peoples or territories recently an- 
nexed. The present territory of Persia has 
for many centuries been recognized as Persian. 
Apart from certain minor boundary rectifications 
in the northeast, no part of the territory of Persia 
appears to be claimed by any foreign government, 



and I doubt whether there is any region of Persia 
or any part of the population which, if a fair 
plebiscite were taken, would vote for independence 
or for annexation to another country. The polit- 
ical traditions of her people run back almost un- 
broken for three thousand years, to the glorious 
epoch when Persia was a world empire. There 
is also in the people a cultural unity and a 
cultural tradition that, although tenuous, contrib- 
ute to the feeling of nationality. 

In general, there are in the population of Persia 
no apparent differences of race, language, reli- 
gion, or tradition great enough to complicate seri- 
ously the accomplishment of national unity. The 
principal conditions which retard unification are, 
in my opinion, the sparseness of population, the 
mountain ranges and deserts, and the difiSculties 
of internal transportation and communication— all 
of which have hindered the extension of the politi- 
cal and administrative authority of the Central 
Government and, economically, have tended to 
create in various sections of the population, par- 
ticularly at the borders, feelings of self-sufficiency 
or of greater commercial dependence on a neigh- 
boring country than on the other sections of 

■ Before 1906, the government of Persia was 
vested in the Shah, whose power was in theory 
absolute and in practice limited only by the sanc- 


His Imperial Majesty, Ahmad, Shah of Tbusia 


tions of custom, by the influence and legal author' 
ity of the mujtahids or religious leaders, by the in- 
fluence of the foreign legations, and by his own 
formal acts and those of his predecessors, which, 
particularly in the case of concessions to foreign- 
ers, constituted a restraint on arbitrariness. In 
1906, the Persian people forced the Shah to grant 
a constitution, under which a National Consulta- 
tive Assembly or Majless was established. An 
attempt by Mohamed Ali Shah to overthrow the 
Constitution was defeated and his abdication, in 
1909, was followed by the accession of Sultan 
Ahmad Shah, the present occupant of the throne. 
With the exception of an unsuccessful attempt by 
Mohamed Ali Shah, in 1911, to reestablish himself, 
there has been no effort of any significance to re- 
store absolutism. Meetings of the Parliament 
were interrupted during the World War, but the 
fourth Majless was elected and convened in 1921 
and after an orderly election, was succeeded by 
the fifth Majless, which is now in session. 

The written Constitution consists of the so- 
called Fundamental Laws issued by royal far- 
man on December 30, 1906, and October 7, 1907.^ 
The principle of constitutionalism is rightly held 
sacred in the minds of progressive Persians; but, 
like all constitutions which have to be stretched 

1 For the full text of the Constitution, see Shuster, "Strangling 
of Persia,” pp. 337-356. 



if they are not to be broken, the provisions of this 
one have taken on in practice a measure of elas- 
ticity and tentativeness. 

In the Constitution, the powers of the Shah are 
limited in general to those usually accorded a 
monarch under the cabinet system of government. 
The Prime Minister or President of the Cguncil, 
who is the actual executive, is nominally appointed 
by the Shah, but really by the Majless. The Pres- 
ident of the Council names his ministers and in- 
troduces them to the Shah and the Majless. The 
President of the Council with his ministers con- 
stitutes the Council of Ministers, which possesses 
general executive power, issues decrees for the 
enforcement of laws, and in the absence of the 
Majless possesses provisional legislative power. 
When the Prime Minister loses his majority in the 
Majless, he resigns with all of his ministers*; and 
a new cabinet is formed. In the past, there were 
frequent changes of government, indicated by the 
fact that there are at present eight living ex-prime 
ministers of Persia and that the average tenure 
of office of Ministers of Finance has been about 
three months. 

From the arrival of the American Mission in 
Persia to the present time, however, there have 
been only three changes of government, the pres- 
ent one, headed by Eeza Khan Pahlevi, having 



lasted with some changes of ministers from Oc- 
tober, 1923. 

The Council of Ministers meets three times a 
week, in a room at the palace. The President of 
the Council sits at the head of the table, with the 
Minister of Finance at his right and the Minister 
of Foreign Affairs at his left. The council has 
its own clerical staff. Decisions are made and 
business transacted with despatch. 

According to the Constitution, the ministers are 
responsible to the Ma jless ; they may sit and speak 
in Parliament and they must answer the questions 
that are addressed to them by the deputies. A 
Persian minister is an altogether too busy man. 
He attends his office at his ministry ; he is present 
at the sittings of the Council of Ministers; he 
must frequently attend the sessions of the Maj- 
less. In addition he has the social responsibil- 
ities which pertain to his position and he must also 
play his part in the politics of the cabinet of 
which he is a part. It is true that he has an under- 
secretary who shares certain of his administra- 
tive work and who may attend the Majless in his 
place; but, nevertheless, the manifold duties that 
are thrust upon him account in part for many of 
the charges of slowness, procrastination, and in- 
efficiency that are brought against him. 

The members of the Majless are elected by uni- 



versal manhood suffrage for a period of two years. 
A new electoral law is now under consideration 
in the Ma jless, and it is expected that it will make 
substantial improvements in the methods of elec- 
tion. Voting is by secret ballot, hut it extends 
over a period of several weeks, and after the ac- 
tual voting is completed, the counting of the bal- 
lots is for some reason a laborious and time- 
consuming task. The elections for the fifth Maj- 
less dragged through three or four months; and 
there was an interregnum of several months be- 
tween the closing of the fourth Majless and the 
opening of the fifth. 

The maximum number of deputies is fixed at 
one hundred and sixty-two, but the Constitution 
prescribes that in case of necessity the number 
may he increased to two hundred. At present, 
the Majless is composed of one hundred and 
thirty-five members. The Constitution provides 
that the deputies shall represent the whole nation, 
and not merely the particular classes, provinces, 
departments, or districts which have elected them. 
Many of the deputies, therefore, unlike the mem- 
bers of the American Congress but like the mem- 
bers of the British House of Commons, are not 
residents of their constituencies. A distinguished 
or influential Persian sometimes receives a ma- 
jority of the votes in two or more districts. Beza 
Ehan Pahlevi, for example, was elected by four 
. 132 


or five constituencies. In such an event, the 
deputy-elect chooses the constituency which he de- 
sires to serve. Due to the method of election and 
other causes, a disproportionate number of the 
deputies are residents of the capital. 

In addition to the deputies of Moslem faith, the 
Jewish, Armenian, and Zoroastriau minorities 
each elect one representative. While the depu- 
ties are nominally elected on a territorial basis, 
they nevertheless represent roughly the social and 
economic classes and interests of the country. 
Thus, there is always in the Majless a large num- 
ber of mullahs prepared to voice the important 
religious interest, and a large majority of the 
deputies — ^including, of course, many of the mul- 
lahs — ^are landed proprietors. The present Maj- 
less comprises also a few newspaper men and 
one or two physicians and lawyers. 

The Majless is housed in a group of well- 
constructed and commodious buildings which with 
the beautiful surrounding garden are the special 
pride of the deputies. These buildings, as they 
are at present, are a monument to the devoted 
service of the Zoroastrian deputy, Arbab Khaikos- 
row Shakrokh, who since the establishment of the 
Majless, has been continuously the elected mana- 
ger of its administrative organization. 

The chamber of the Majless, with its rostrum, 
its dais, its ascending rows of seats arranged in 



the form of an arc, facing the president’s desk, its 
galleries, its tastefully ornamented walls and ceil- 
ing, its electric chandeliers, and its general dig- 
nity, will compare favorably with any of the 
legislative chambers at our State capitals. 

At the beginning of each Majless and at the end 
of each year the deputies elect from their own 
number officers and commissions. They usually 
select for their presiding officer a man distin- 
guished for honesty, dignity, patriotism, and 
statesmanship, and the present President, Mota- 
men ol Molk, thoroughly exemplifies these qual- 
ities. For the election of commissions, the depu- 
ties are divided into six sections, each of which 
chooses one, two, or three of its members, accord- 
ing to the size of the commission. The Budget 
Commission, the largest and most important, con- 
sists of eighteen members. Other commissions 
are those on Foreign Affairs, Financial Laws, Mil- 
itary Affairs, Justice, Education, Economics, and 
Petitions. There is also an Initiative Conunis- 
sion whose function is to discuss and propose new 
legislation. In February, 1924, a committee of 
twelve, consisting of the leading deputies, repre- 
senting all groups, was appointed at the request 
of the Prime Minister to cooperate with the Gov- 
ernment in the formulation of important policies. 
This commission has proved to be a most useful 
organ, crystallizing sentiment in the Majless and 



bringing about better cooperation between the 
Government and the Parliament. 

The procedure of the Majless is not unlike that 
of other legislative assemblies. A project of law 
is ordinarily introduced into the Majless over the 
signature of the Prime Minister and the con- 
cerned minister. It is then referred to the appro- 
priate commission. Projects rarely go through 
the commissions without amendment. After the 
commission has acted on a project, it is pre- 
sented to the Majless by the reporter of the com- 
mission. If the Government urgently desires the 
measure passed, it will ask the Majless for imme- 
diate consideration, in which case the bill will be 
given priority over others on the calendar. De- 
bate on a bill usually starts with a formal speech 
by a member of the Cabinet or by the chair- 
man of the commission which has reported the 
bill, followed by a speech from the leader of the 
opposition. Speeches then alternate for and 
against the bill. When it becomes the sense of 
the deputies that the discussion is sufiScient, a mo- 
tion to that effect is made and put, and if it is car- 
ried, the debate is closed. The discussion of a bill 
passes through two stages. The first stage is con- 
cerned with the principle of the bill; the second 
deals with the articles, one by one. During the 
second stage, deputies may send to the rostrum 
written amendments which are read by the secre- 



taries. The proposer of an amendment rises in 
his place and argues for the amendment; the 
Government, if it opposes the amendment, makes 
an opposing speech through one of its leaders. A 
vote is then taken on the amendment. The Gov- 
ernment can withdraw a project at any time. The 
Majless takes its work seriously; its debate? are 
as dignified and orderly as those in the United 
States Senate; the attendance of the members is 
much better ; and disturbances are no more 

The lack of lawyers in the Majless and in the 
Government leads to a method in the drafting and 
passing of law-projects which impresses a West- 
erner as extremely loose, if not dangerous. Little 
attention is paid to precision of statement, and 
the provisions of a law are sometimes vague or 
self -contradictory. Nevertheless, this feature' of 
a Persian statute does not seem a serious defect ; 
since it is the purpose of the Persian legislator to 
embody in the statute only fundamental principles 
and not to endeavor to foresee all possible con- 
tingencies which might arise in its enforcement. 

The courts of Persia are still inadequate for the 
development of law. There is a judicial system, 
established according to the Constitution and a 
statute enacted by the Majless, but there is much 
criticism of the courts for alleged incompetence, 



corruption, slowness of procedure, and subservi- 
ency to political and personal influence. The 
highest court of the country declared a few months 
ago that there was no penal law in force. Many 
Persians appear to prefer arbitration to recourse 
to the courts. Persia has produced at least one 
eminent jurist in the person of Zoka ol Molk, the 
present Minister of Finance, who has served with 
distinction as Chief Judge of the Supreme Court. 

The body of Persian law is of two classes : the 
religious law, based on the Koran and adminis- 
tered by the mujtahids and mullahs, and the com- 
mon law, based on custom. 

The civil courts take cognizance of both 
branches of the law, and for the usage of the 
courts the law is in process of codification by 
French lawyers. 

The weak point in Persian jurisprudence, at its 
present stage, is with regard to the sanctions of 
law. Persians too often look upon a law as 
merely a pious wish. The reasons for this state 
of affairs are not far to seek. The Persian is not 
vindictive ; the oflBcial class, in which violations of 
the public law are most likely to occur, is bound to- 
gether by ties of family relationship and personal 
acquaintance; due to social and economic condi- 
tions, which have been previously mentioned, the 
honor of the State seems less prceious than the 



family. Accordingly, breaches of law sometimes 
occasion superficial indignation but are usually 
followed by forgiveness. 

As the power of the executive becomes perma- 
nent, as industry grows, as the appreciation of na- 
tional unity and governmental efficiency impresses 
the value of uniform rules, the substance and 
the apparatus of law also will develop. There is 
not, in Persia, any universal ignorance of the 
meaning and value of law. There are many Per- 
sians who have a thorough grounding in the his- 
tory and theory of European law ; others are pro- 
foundly versed in Mohammedan and Persian 
law; these and others understand the need for a 
better legal regime. Neither is there in Persia an 
absence of law in its broad sense. The soil from 
which law grows appears to exist. There is re- 
spect for authority and a marked tendency to ob- 
serve precedents. The people are conservative, 
peaceable, and essentially law-abiding, and there 
is probably less of the spirit of lawlessness in 
Persia than in Western countries. There is little 
disorder and there are few private crimes and mis- 
demeanors. Further improvement is bound to 
come from the desire to achieve the accepted evi- 
dences of nationalism by abolishing the capitula- 
tory rights of foreigners. Financial reform, also, 
will not only raise the moral tone but encourage 
independence and integrity on the part of the 



judges by providing them with adequate salaries. 

According to Persian constitutional theory, the 
Majless is the depository of sovereignty in the 
State ; and in practice the Majless asserts success- 
fully its claim to supreme power. As the guard- 
ian of the Constitution and the fundamental insti- 
tution of representative government, it is right- 
fully jealous of its prerogatives. 

In their infancy, the parliamentary institutions 
of the West were based on class- and interest- 
representation. They were intended primarily as 
organs for giving the approval of the taxpaying 
classes to the revenue proposals of the executive. 
It was centuries after their origin that they first 
attempted statutory legislation, and it was still 
later that they began to prescribe the rules of 
administration. They were intended as places to 
talk, to parler, rather than as organs of direct au- 
thority. As a result of their fiscal control, they 
developed the power of setting up and overthrow- 
ing governments, of making laws and supervising 
administration. At the end of a long chapter of 
history, — ^in which parliaments were virtually 
synonymous with liberty itself, — they began to 
lose prestige and to experience changes. 

Throughout the Western world, parliaments are 
now on the defensive. They tend to abdicate 
their initiative in legislation; with regard to ad- 
ministration they tend to confine themselves to 



powers of criticism, supervision, and veto; the 
modern budget has reduced their control of ex- 
penditures to a mere veto, and with regard to rev- 
enues the tendency is to give the executive a 
greater flexibility of action and more discretionary 
power. It will bo interesting to see, therefore, 
whether or not the Persian Parliament — one of 
the youngest — ^will avail itself of the lessons of his- 
tory and avoid the errors of other parliaments. 
A country in the stage in which Persia finds itself, 
needs, obviously, a strong executive. An as- 
sembly cannot be at the same time the executive. 
The Parliament should be the organ of public 
opinion. It should control the executive without 
hampering it. 

The signs in the political skies of Persia which 
give hope regarding the success of its parliament- 
ary experiment are the following: The Persian 
'Parliament consists of a single house, which^ is 
not unwieldy in number. It enjoys in general 
the confidence of the people. It is dignified, de- 
liberate, and conservative. It tends to do too 
little, rather than too much. It is on the whole 
progressive and on economic matters sound. It 
leaves to the executive the initiation of legislation 
and confines itself mainly to laying down the gen- 
eral principles of law, leaving their details to ad- 
ministrative regulations. It is not capricious in 
its interpellations and votes of confidence. It ad- 



heres faithfully to the fundamental principles of 
the budget — ^namely, that all proposals for ex- 
penditure should originate with the executive and 
that no item of expenditure should bo increased 
by the Parliament. 

In developing as an organ of public opinion, 
the Persian Parliament is hampered by the fact 
that there is in the country no public opinion such 
as we know in the West. The masses of the 
people are illiterate and inarticulate. The news- 
papers are improving, but they are still inade- 
quate as organs to mold and express opinion. 
Persians, however, show an intense interest in 
news, and it is astonishing how quickly rumors 
rise and spread among the people. In Teheran 
there are at least twenty false rumors to one true 
one. Opinion, discussion, and group political 
action, however, exist. Speeches on political sub- 
jects are made to the people in the mosques, in 
the bazaars, and at meetings in private houses. 
Societies are organized for the discussion of 
particular public questions. At one stage in the 
history of the American Mission, a number of 
the finance disponibles were organized and held 
regular meetings and undoubtedly made their in- 
fluence felt on the Government and in the Majless. 
Lobbying is practised. The most common means 
of bringing public pressure to bear on the Govern- 
ment, however, is through the practice of bast. 



The Persian Constitution was granted after the 
people had taken bast in the British Legation — 
that is, congregated there, refusing to leave until 
their demands had been granted. Landowners 
who believe that they have been dealt with un- 
fairly by the tax-assessors take bast. For weeks 
a number of claimants against the Ministry of 
Finance have been taking refuge in the Majless. 
Unemployed men have threatened to come to my 
homo and stay there unless I gave them jobs. 
Bast, at least when it is directed against Persian 
officials, is one of the most powerful and effective 
means of protest. The most potent, however, is 
probably the closing of the bazaars. The strike 
also is used, but chiefly by government employees. 
In general, the Persians have a marvelous apti- 
tude for passive resistance and passive protest. 

In Western countries, governments function 
and public opinion is expressed through political 
parties. In Persia, there is an almost complete 
absence of political parties in the Western sense. 
There are various groups in the Majless, but these 
groups do not extend outside the Majless and, 
except for their parliamentary leaders, they 
have no organizations. In the elections, the can- 
didates are personal ; they do not represent 
parties; they are not nominated by party ma- 
chinery. The so-called “parties” in the Majless, 
which are merely fluctuating groups of deputies 



working together temporarily, are nnmerons, 
short-lived, and constantly changing in member- 
ship. The supporters of the Government and the 
deputies of the Opposition are not clearly dif- 
ferentiated. In October, 1924, the groups in the 
Majless were: the Tajaddud (“Renewal”), which 
was the majority group consisting of twenty depu- 
ties; the Azadi-khdh (“Liberal”), twenty-three 
members; ihe Mellioun (“National”), seven mem- 
bers; the Takamol (“Evolution”), sixteen mem- 
bers; the Gheyam (“To Stand”), twelve mem- 
bers; the recognized opposition deputies, num- 
bering thirteen; and the so-called Independ- 
ents, who have similar ideas but are supposed to 
act individually, eighteen in number. There were 
also a few deputies who were apparently unat- 
tached. During the following months, realign- 
ments took place. It was reported in the press on 
March 4, 1925, that a number of deputies had de- 
cided to resign from the various groups to which 
they belonged and form a new group to be called 
Taraghi-khcih (“Progressive”), and it was re- 
ported on. April 8, 1925, that ten deputies had 
formed a new group to be known as Ettefagh 

While there is no clear differentiation among 
Persian politicians on the basis of principles, — 
no alternating duel between conservatives on the 
one hand and radicals, liberals, progressives, or 



laborites on the other, as in the United States 
and Great Britain, — ^there are in Persia, never- 
theless, certain fundamental political ideas which 
are rallying points and which may eventually 
become the issues which will divide the people 
and the deputies into real parties. There is, for 
example, the idea of nationalism, which is at 
present potent in Persia. Around this idea 
gather those who want a unified, independent 
self-governing Persia, independent of foreign 
governments. This idea carries with it the de- 
sire for strong government and progressive 
economic policies. Those Persians who adhere 
to the idea of nationalism are likely to support 
in principle the American Mission and any other 
political institution or policy which makes for 

The mullahs or religious chiefs, of course, have 
been and will be for some time a factor to be 
reckoned with in the social and political develop- 
ment of the country. They are, from the nature 
of the case, leaders of opinion; they are strong 
in the Majless ; they exercise a powerful influence 
in the administration of education and in the law 
courts; they have certain recognized legal func- 
tions, such as the attesting of deeds and other 
documents. Whatever the social effects of their 
influence may be, I have found from experience 
that they are not hopelessly reactionary in eco- 


New gate of abmi drillismeodsds at Teheeas 


nomic and financial matters. The recognized 
leader of the mullahs in the Majless is Modarres, 
who was recently elected First Vice-President 
of the Chamber. Modarres has the reputation 
of caring nothing for money ; he lives in a simple 
house and garden unfurnished except for rugs, 
books, and benches. He wears the beard and 
simple clothing of the old Persian, and, a scholar 
among Persians, he speaks no foreign language. 
Meeting him, one cannot fail to be impressed by 
his simplicity, directness, and common sense. In 
his public acts, he is consistent and courageous. 
At heart an apparently sincere Persian national- 
ist, he has often said to me: “I am not inter- 
ested in the little details of administration. Talk 
to me only of the big things, and if you show 
that you are doing big things, I am with you.” 

The general religious thought of educated 
Persians is distinctly liberal. Although I have 
made no studies which would equip me to dis- 
cuss the religious institutions of Persia in their 
relation to Persian politics and economics, it is 
worth remembering in this connection that, what- 
ever may be the situation in Persia, the Western 
nations, with few exceptions, have had to deal in 
the course of their development with authori- 
tarianism and powerful priesthoods. 

The position of women in Persia constitutes an 
inhibition by custom and conservatism of a tre- 



mendously vital political and social force. The 
place of woman is considered to be in the home, 
and she ordinarily has no social intercourse 
except with the women of her acquaintance and 
with her immediate male relatives. When ap- 
pearing in public, she is completely shrouded in 
a chuddar — a black covering which conceals her 
head, face, figure, and dress. She lives with her 
children in the anderun; her husband meets his 
friends and callers in the birun, which is usually 
a separate and smaller house. She marries 
early, sometimes as young as eleven or twelve, 
the marriage, if custom is followed, being ar- 
ranged by the parents of bride and groom. She 
rarely goes about in public with her husband. 
It has not been my privilege to meet and talk 
with Persian women: they have no part in the 
official or social life to which I am admitted, amd 
they are not generally employed in the public 
administrations, although they serve as teachers 
in the girls’ schools and as police matrons. I 
have no reason, however, to suppose that they are 
less intelligent or capable than the Persian men. 
Among Persian men, I have never heard any talk 
of the inherent inferiority of women. I do not 
know whether or not Persian women are con- 
tented with their lot, but certainly there are no 
public manifestations of discontent on their part. 
They are clearly not “emancipated” like Ameri- 



can women, but the women of Persia are poten- 
tially, and they have proved themselves in the 
past to be actually, a powerful influence for good 
politically. At the present time, they have 
progressive ideas and purposes. They organize 
societies, and a certain evolution is said to be 
taking place in their customary costume. 

Polygamy is not generally practised or ap- 
proved in Persia; and it is probable that if the 
legal and social facts were fully set forth, it would 
not figure as a recognized institution at all. 
There is doubtless as much sentiment in Persia 
against indiscriminate marrying and loose sexual 
relations as there is in Western countries, — 
possibly more, — and it would be extremely dif- 
ficult for a Westerner with facts available for a 
fair comparison on this subject, if he were honest 
with himself, to place the Persian on a lower 
moral plane than himself with respect to sexual 
morality or the sanctity of the family. 

Of^the administrative branches of the Oovern- 
ment, the most important and significant is the 
Ministry of War, which is headed by Beza Khan 
Pahlevi and which has jurisdiction over the army, 
the Amnieh (Road Guards), and the police of 
the city of Teheran. The regular army is stated 
to enroll forty thousand men. It is recruited 
partly by individual volunteers and partly by 
soldiers furnished by the villages in proportion 



roughly to the size of the village. The military 
forces are entirely Persian in personnel. The 
army oflScers, in many cases, have been trained 
in foreign countries or under British, Swedish, 
and Russian officers, while the police force was 
organized and was until 1923 under the direction 
of Swedish officials. The army is equipped with 
motor-trucks, a few armored cars, tanks, and 
aeroplanes, and has a high-power wireless station 
at Teheran, with branch stations in the provincial 
centers. While the army is neither organized nor 
adequate for aggressive purposes, it is, to judge 
by its accomplishments, well adapted and efficient 
for the maintenance of order within the country. 
There is a uniformed police “force" in all the 
larger cities, the police of Teheran comparing 
favorably with police organizations in other 
countries. The Amnieh or Road Guards;; are 
stationed along the highways and keep them so 
safe that automobiles run at night on the northern 
roads and there is little banditry in any part of 

Persia, for purposes of administration, is 
divided into twenty-six provinces, which are gov- 
erned by governor-generals, who in many cases 
at present are military officers of high rank. The 
provincial governors are directly responsible to 
the Central Government and come under the juris- 
diction of the Ministry of the Interior. The 



cities and toyms are in general governed by 
municipal conunissions. The last vestiges of the 
ancient satrapal system of local administration 
are rapidly disappearing in Persia. For a long 
time after its forms had vanished, its spirit re- 
mained; for governors and financial agents 
bought their jobs and preyed on the people for 
their compensation. Administrative services, 
such as the post, telegraphs, mint, and the collec- 
tion of various taxes, were farmed out. As a 
result, administration became local and personal 
and there were no uniform regulations applying 
to the whole country. To-day, modern and uni- 
form principles of administration are becoming 
universal. In reacting from the ancient methods 
of oppression, there has possibly been a too great 
tendency toward centralization. The Constitu- 
tion provides that throughout the empire provin- 
cial and departmental councils (anjumans) shall 
be established, the members of which shall be 
elected by the local inhabitants; and legal provi- 
sion has already been made for the election of 
rural and town councils. 




H ad Wells’s “First Men in the Moon” 
been the advance-guard of a foreign 
financial mission- employed by the ant in- 
habitants of our satellite, their experiences would 
have been indeed exciting. They would doubtless 
have had to use curious mechanical antennae, cal- 
endars as different from ours as the hour-glass 
or sun-dial is from the clock; and what troubles 
they would have had with their piping insect in- 
terpreters! A twentieth-century American- going 
to Persia carries an equipment of language, 
script, calendar, nomenclature, and habits of 
work; but these, unluckily for him, arc not those 
to which the Persians are in general accustomed. 
He must learn other ways of working. He must 
not only adapt himself to the psychology of the 
people, their social life, and their political insti- 
tutions, but also consciously and continually 
guard against a hundred possibilities of error and 
misunderstanding which arise through the em- 
ployment of unfamiliar tools and instrumentali- 



The difference in language is a serious one. I 
have yet to enlist as a member of the Financial 
Mission an American who can speak or write the 
Persian language. It is not, however, a difficult 
language to learn to speak. Mr. Pearson and Mr. 
Flannagan in a few months made encouraging 
progress toward mastering the spoken language. 
It contains few inflections, and rolling from the 
tongue of a cultured Persian, it delights the ear 
with its sonorous measured cadence. The script, 
which runs from right to left, resembles in ap- 
pearance tightly written American shorthand, 
and except after painful study it is as impenetra- 
ble as a jungle. Persians pride themselves on the 
correctness of their speech, but they pride them- 
selves’ still more on legible and beautiful hand- 
writing. A page of Persian written by a good 
scribe is as artistic as a medieval manuscript. 
The line is kept scrupulously straight except for a 
graceful upward curve at the left and abounds 
in shadings and delicate tracery. So compact is 
it, that it covers usually not more than one third 
of the space of the equivalent in English. 

If the Persians had not been linguists, or if they 
had not shown their cosmopolitanism before we 
came, by the acquisition of foreign languages, our 
task would have been not merely difficult but im- 
possible. Almost all Persians in official life, in- 
cluding thousands of subordinate employees in 



the administrations, speak, read, and write 
French. Hundreds of them know English in ad- 
dition to French, and many have an excellent com- 
mand of our own tongue. Of the more distin- 
guished public men, Motamen ol Molk, the Presi- 
dent of the Majless, Zoka ol Molk, the Minister 
of Finance, and deputies such as Hossein Khan 
Alai, Arbab Khaikrosrow, and Taghi Zadeh, speak 
excellent English. Others speak it well enough to 
carry on conversations without an interpreter. 
There are also, of course, numerous Persians with 
a knowledge of Turkish and Russian and some 
who are acquainted with German. A few of the 
members of the American Mission speak French ; 
but in the main, our chief reliance in conversa- 
tions with Persians, other than those who under- 
stand English, has been on English-speaking Per- 
sian interpreters. 

Each of the Americans — ^with the exception of 
’Major Hall, who uses French — ^has a staff of 
young Persians engaged in translating and inter- 
preting. I have in my own ofiBce a Persian secre- 
tary named Merat, a Persian typist named Khalil 
Meskin, and a staff of interpreters, translators, 
and copyists headed by an active youth named 
Ettesami. "With the exception of two or three 
copyists, all know English. In addition, I have 
for my more important conferences and corre- 
spondence, and particularly for the translation of 



my quarterly reports, an able Armenian Persian 
of middle age, named Mirzayantz, who has seen 
service in the Majless, who enjoys an exceptional 
acquaintance and a high reputation among Per- 
sian patriots and politicians, and who speaks 
Persian, Armenian, French, and English. Af- 
shar, who in the beginning was chief interpreter, 
spoke Persian, English, French, Turkish, and 
Arabic. Most of the English-speaking Persians 
received their education in the American School 
at Teheran and gained with the language some- 
thing of the American conception of honor and 
hard work. It is no discredit to the other Per- 
sians who are associated with us, to state that it 
is the increasing group of English-speaking Per- 
sians, most of them young, who have been our in- 
dispensable assistants. 

To say that the Persians are good interpreters 
is to pay them a compliment, for interpreting de- 
mands to the utmost an alert intelligence, tact, 
and resourcefulness. An interpreter cannot, like 
a translator, thumb the pages of a dictionary. 
He must have two vocabularies at his tongue’s 
end, and he must not only be able to put English 
words into Persian words or vice versa but also 
know the delicate shades of meaning that you put 
into words, and, too, the spirit that goes into the 
speaking of the words. The interpreter should 
convey exactly in one language what you seek to 



convey in another, and shonld do it in thp same 
tone, whether of cordiality, formality, cpldness, 
emphasis, or anger. A first-class interpreter will 
accurately sense your mood and purpose, often, 
perhaps unconsciously, punctuating his interpre- 
tations with the emphasis, gestures, sn^iles, and 
laughs that you have added to your remarks. 

It is a tribute to the character of the young Per- 
sian to add that the instances in our experience 
where an interpreter or translator has attempted 
to misuse his peculiarly responsible position are 
so rare as to be virtually negligible. There was 
at first a natural and rather wide-spread feeling, 
particularly among those who had met with disap- 
pointment in their conversations and correspond- 
ence with us, to charge their failures to our Per- 
sian interpreters or translators, accusing the lat- 
ter of keeping letters, from our sight or of 
suppressing or coloring essential portions of con- 
versations. Charges have been made, also, that 
some of our interpreters and translators were 
secretly intriguing with the enemies of the Ameri- 
can Mission, and were deliberately putting our 
words into discourteous Persian phrases in order 
to set our friends and the public against us. In 
my opinion, after the application of careful 
checks, these charges appear to be ninety-nine and 
forty-four hundredths per cent, untrue. As an 
example of the feeling of our correspondents on 



this score, I quote below a routine English trans- 
lation of a letter received in my oflSce from one 
having a claim against the Adaainistration of 
Posts : 

Administrator General op the Finances: 

I beg to say that you have said, in reply to the petition 
of 14/7/03 through the administration of accounts under 
No. 18604 dated 29/7/03, that you will inquire about my 
demand from the Government transportation and then 
will answer me. In 10/6/2 and 26 Safar 1342 I peti- 
tioned concerning this fact. You have written under 
No. 12771 that after investigating and getting informa- 
tion from the Ministry of Posts and Telegraphs you 
will answer me. Now I am for fifteen months idle and 
it is nearly eighteen months that my money is by your 
order suspended and myself distressed and suffered dam- 
ages. Is it fair to vex and annoy God's slaves? We 
are like a bug whose abode is ruined by a dew. I can 
find no sin or fault with myself save that I have ren- 
dered service to my own Government in such a way that 
the Post should not be detained. After four months of 
idleness and spending one hundred tomans in the center, 
they answer that I have to wait until the order for pay- 
ment should be issued by you. 0 ! Sir ! 0, my mas- 
ter! I have neither Noah's age, nor the Koran's 
treasure, nor Job's patience. I helplessly solicit you to 
command that the Ministry of Posts and Telegraphs 
should order the administration of Governmental trans- 
portation to pay my just demand for eleven hundred 
tomans and a fraction. By all the saints and by your 



own honor and conscience, order them to pay my money, 
so that I too, ^ould pay my creditors and in the com- 
mencing winter be free from the misery of strangeness 
and return back to my own nativity and, with a family 
of twelve persons, pray for you. Command is your 

Mohamed Hussain op Ispahan, 
Resident in Eermanshah 
without food and clothes. 

{In caravanserai of Seka Bashi, 0 God, death or sal- 
vation! If the translator does not translate this petition 
in full, word for word, he may he cursed by God and 
execrated by the apostle, so that Dr. Millspaugh should 
peruse it and be informed of this miserable affliction.). 

Another correspondent, also with his eye on the 
translator, added the following: 

May I be sacrificed to you : though it is unreasonable 
emphasy but I request that this letter should be per- 
fectly translated that you might favor one of your kind 
too. Please excuse me for this remind. 

It is the chance of honest error, not the inten- 
tion to misinterpret or mistranslate, which con- 
stitutes the problem. For months we had an 
amicable disagreement with the Minister of Fi- 
nance over the meaning of a certain provision of 
the Civil Service Law. Finally, we were forced 
to recede from our position when we found that 
our English translation of the clause contained 
the word “salary” when the Persian word should 



have been translated “pension.” Many errors 
in translation are merely mistakes in spelling. 
A letter may be addressed to the “Costumes” 
Administration, but we send it to the customs, 
not to Paris; and when a Persian translator 
speaks of “passports and their vices,” we agree 
from experience that visas have little of the qual- 
ity of virtue. The chances of honest error are 
high. It is difficult at the best for an American, 
with an intellectual apparatus of American make, 
to convey his ideas to another person, who may 
be equally intelligent but who has a mental equip- 
ment of different origin and different operation. 
Most of the technical words in the vocabulary of 
modern science, industry, banking, and commer- 
cial law are unknown to the Persian and have no 
equivalents in the Persian language. For ex- 
ample, the expression “and/or” used in a pro- 
posed concession was impossible of translation 
into Persian and tended to obscure the meaning 
of the whole document ; and much correspondence 
and some expense were caused by our failure in 
drafting a circular to explain clearly the dif- 
ference between “accounting” forms and “ac- 
countable” forms. Persian interpreters and 
translators, moreover, have in many cases merely 
a book or school knowledge of English without 
much understanding of the idioms which are the 
living flesh of our language or of the abstract 



words which clothe our reasoning. On the other 
hand, curiously enough, some Persians speak and 
write better in English than they do in their own 
language. I have been dazed by hearing from a 
Persian, “So-and-so in your office knows English, 
but he doesn’t know Persian.” 

I am told that Persian is primarily a literary 
language; and when the polite and poetical 
phrases are omitted, it strikes one as awkward, 
incorrect, or discourteous. Young men are dis- 
posed sometimes to be a little impatient of lingual 
adornment and to give our blunt American bus- 
iness phraseology a too-literal Persian transla- 
tion. For example, I wrote a letter at one time in 
which I ventured the opinion that the Budget 
Commission of the Majlcss had pursued a short- 
sighted policy. In the Persian of my letter, -a 
word was used for “short-sighted” which in- 
variably gives offense to Persians; and to make 
matters worse, this word appears to have been 
applied to the members of the commission rather 
than to their policy. Accordingly, interpretation 
and translation not only retard the routine work 
of administration but also consume the additional 
time and energy required for explanations and 

According to the law and my contract, all offi- 
cial books, records, and correspondence in the 
financial administration must be in the Persian 



language; but, to reduce so far as possible errors 
and misunderstandings, we have all the outgoing 
and most of the incoming correspondence trans- 
lated into English and keep in the files both the 
Persian and the English; many of the important 
letters which I address to the Prime Minister, the 
ministers, or the deputies are written and sent 
with the English and Persian in parallel col- 
umns; we have cautioned our translators and 
interpreters to put the meaning of the English 
into courteous literary Persian; and we have 
ourselves taken cdre to speak and write in 
simple, clear English, avoiding legal circumlocu- 
tions and technical financial expressions. On the 
whole the gap between the two languages has 
been bridged Vdth fair success ; and the use of an 
interpreter has at least one advantage: it gives 
time to think during a conversation. 

That tfanslation difficulties are not peculiar to 
the American Mission, is shown by the following 
excerpt from a Teheran newspaper : 

We are informed that certain differences were created 
ip the translation of the treaty between the Russian and 
Persian Governments from French to Persian language 
and now the matter is under discussion between the Rus- 
sian Legation and the Ministry of Poreign Affairs. We 
wonder how it has been signed. 

Much of the discussions with the Russian lega- 
tion concerning the fisheries turned on the word 


“exploitation,” •which occurs in the Russian text 
but not in the Persian, while the treaty says that 
both texts shall be of equal authority. 

With regard to quantity of correspondence, 
Persian administrations handle as much paper as 
any bureau at Washington, with probably less 
red-tape, and their filing systems are efficient. 
Persian ministers appear to have felt in the past 
that government records were their private prop- 
erty, and they acted accordingly — ^with, at times, 
disastrous results to the Government. At pres- 
ent, however, government documents are better 
safeguarded. Many valuable records regarding 
taxation and accounts are still in the hands of the 
old mosto'wfis, who in most cases were honest and 
experienced but who considered their fiscal rec- 
ords as much their private property as a lawyer 
or a physician does his o'wn library. Labor- 
saving office devices are of course less necessary 
where labor is cheap, and I have seen in Persia 
no adding machines, cash registers, or other 
mechanical appliances which are common in 
American offices. There are to my knowledge no 
Persian stenographers, and all of the American 
members of our mission have worked for more 
than a year without stenographic assistance. 
The proceedings of the Majless are taken down 
by a group of four young men who write by turn 
in longhand; one starts when the leader touches 


His Imperial Highness, the Valiahd, Crown Prince of Persia 


him on the shoulder and writes rapidly to the 
point at which the signal is given to another. A 
number of typewriters, operated by Persian typ- 
ists, are in use, and some of them type in the Per- 
sian language. Since our arrival, the few printed 
forms that were then in use have been increased 
in number, until now financial reporting and other 
routine operations are conducted by the use of 
appropriate forms. We have introduced the in- 
delible pencil and carbon paper in the preparation 
of duplicates. 

The telephone system in Teheran is well in- 
stalled and well conducted from the business 
standpoint, and the service, which is now some- 
what slow and exasperating, promises improve- 
ment. The habit of calling your party by name 
instead of by number causes some confusion. 
Telegraph wires connect all of the principal 
points in Persia, and telegraphing is cheap. The 
fire-hazard in Persian cities would appear to be 
serious; there is no fire-proof construction and 
there are, except possibly in Rasht and one or two 
other places, no fire departments. The Ministry 
of Finance building burned seven years ago, and 
the destruction of a part of the archives on that 
occasion has embarrassed us somewhat in the 
handling of old cases. Fires, however, are not 
frequent in Persia. 

It is a common remark that time means nothing 


to an Oriental ; but an American working in Per- 
sia soon learns the falsity of this generalization. 
Time in Persia means a working knowledge of at 
least three calendars. Furthermore, .when the 
Persians see something wrong with their own 
official calendar, instead of talking about it inter- 
minably, they change it. The American Mission 
in 'its official functioning has followed the^ Persian 
solar year, beginning with Now-Ruz (New Year’s 
Day), which falls on the first of Farvardin ac- 
cording to the new Persian calendar and on 
March 22 according to our calendar. The Arabs 
are said to have introduced into Persia the lunar 
year, consisting of three hundred fifty-four and 
one half days and beginning on the first of Mohar- 
ram. The length of the lunar month varies from 
twenty-nine to thirty days, and the months are 
movable according to the phases of the moon. In 
1923, the first of Moharram fell on the foui^eenth 
of August ; in 1924, it fell on the third of August. 
The religious feasts and holidays are determined 
by the lunar calendar and are likewise movable. 
Both the Persian solar year and the Arabic lunar 
year date from the Hejira of Mohammed in 622 
A.D. ; and accordingly, when we arrived in Persia 
in the fall of 1922 of the Christian era, we found 
ourselves in the solar year 1301 and the lunar 
year 1341. The fiscal year, fortunately, corres- 
ponds with the calendar solar year. Another pe- 



culiarity of the solar chronology is that the years 
not only are numbered but have also been given, 
in cycles of twelve, the names of animals. When 
we arrived in Persia, we were near the end of a 
cycle, the year 1301 being It-Il, the Year of the 
Dog. The following year, 1302, was Tangouz-Il 
the Year of the Hog; the next was Sitchghan-Il, 
the Year of the Rat; and the present year is 
Oud-Il, the Year of the Ox. Other years in the 
cycle are named after the leopard, hare, whale, 
serpent, horse, sheep, monkey, and chicken. This 
cycle of years is said to have been introduced into 
Persia by the Mongols, and the years so named 
are called Turkish years. 

The Persian months, twelve in number, are sup- 
posed to correspond to the twelve signs of the 
Zodiac. Up to Now-Ruz, 1.304 (i. e., March 22, 
1925), the months bore Arabic names; but some 
weeks previously, in accordance with the nation- 
alistic trend, a number of deputies had submitted 
to the Majless a bill for changing the names of the 
months from Arabic to Persian and making cer- 
tain changes in the length of the months. On the 
last day of March, the Majless passed the law, 
which legalizes the Persian solar year beginning 
with the Hejira and provides that “the year- 
counting method being incorrect, beginning with 
the approval of this law the Turkish names which 
have been customary in previous calendars shall 



be annulled.” According to the new calendar, 
the months are as follows: “Farvardin, Ordib- 
ehesht, Khordad, Tir, Amordad, Shahrinar, Mehr, 
Aban, Azar, Dei, Bahman, and Estand. ’ ’ The first 
six months have thirty-one days each; the next 
five, thirty days; and the twelfth month, twenty- 
nine days, with an additional day in leap-years. 
By abolishing, in this law, the twelve-year cycle 
with its year names, the Majless took a step which 
will preclude much confusipn in the records of the 
Government as well as in private transactions. 

The Persian week is of seven days, and the 
Persian day is, according to the clock, precisely 
the same as ours. I say “according to the clock,” 
but the Persian’s day is regulated less by the clock 
than by the rising and setting of the sun. This 
fact is an important consideration in fixing the 
working hours in the government administrations. 
Formerly, there had been in the ministries a Single 
forenoon session in the summer and a two-session 
working day during the remainder of the year. 
A two-session working day, however, requires a 
two-hour intermission for luncheon, because Per- 
sian Government employees, having no quick- 
lunch counters or cafeterias to go to, ordinarily 
take their meals at home, and generally they live 
at a distance from the ministries. To avoid this 
intermission and to enable the employees to save 
the midday carriage fares to and from their 



homes, the subordinate employees and many of 
the high officials have favored a one-session day 
the year round. The Persian habit of rising with 
the sun, however, requires that the beginning of 
their working day shall be at least an hour after 
sunrise. Accordingly, our working day has be- 
come almost as movable as the feasts and mourn- 

There are many holidays in Persia. In addi- 
tion to every Friday, which is the Mohammedan 
Sabbath, the calendar for the present solar year, 
1304, shows twenty-five holidays. In addition to 
the numerous religious holidays, the Persians 
celebrate Now-Ruz, the birthday, accession, and 
coronation of the Shah, and the anniversary of 
the Constitution. 

When the Persian refers to an “evening” of a 
certain day, he is likely to have in mind, as we do 
in speaking of Christmas Eve, the evening before 
the day. On one occasion Mrs. Millspaugh hired 
a juggler to come to the house on Thursday eve- 
ning to entertain some dinner guests. To our 
surprise, he came on Wednesday evening. 

The climate of Persia creates no serious dif- 
ficulties in administrative work. The offices are 
airy, the temperature in the summer does not get 
high before noon, and one who dislikes drafts and 
whirling papers is thankful that electric fans are 
not procurable. Most of the Persian officials and 



foreigners, including all of the legations, go at the 
end of May to summer homes at the foot of the 
Elburz Mountains and return to the city early in 
October. Eight or nine miles from Teheran, 
picturesque villages nestle among the foot-hills 
and cling to the lower slopes of the mountains. 
The “up-country” gardens in these villages are 
delightfully cool, and in the past some of the ad- 
ministrations have been transferred bodily from 
the city. At the worst, the heat in the city during 
July and August is not extreme and is probably 
no worse than in New York or Washington. 

The system of weights and measures in Persia 
has been neither uniform nor exact. The ordinary 
unit of weight is the batman or man of Tabriz, 
equal to 6.495 pounds or 2.946 kilograms. Two 
other batmans have been in use, the so-called bat- 
man of the Shah, equal to two Tabriz batmans, 
and the batman of Rey, equal to four times thdt of 
Tabriz. The kharvar is equal to one hundred bat- 
mans. The unit of measure is the sar, of which 
the one most commonly in use is about forty-one 
inches. The farsakh of six thousand zars, ap- 
proximately four miles, is theoretically the dis- 
tance that can be walked by a horse in one hour. 
One of the first acts of Eeza Khan Pahlevi, when 
he became Prime Minister, was to order the for- 
mation of a conunission to establish a uniform 
system of weights and measures. The new sys- 



tern which has now been proposed by the commis- 
sion, is based on the metric system and will elimi- 
nate the confusion which has formerly existed. 
The units of currency are convenient, the toman 
consisting of ten krans and the kran of twenty 

A source of much confusion, which has now, 
happily, been removed by the progressive action 
of the present Government, existed in the names 
and titles which were borne by Persians. Not 
long ago family names were unknown in Persia ; 
and individuals were usually called Reza, Moham- 
ed, Ahmad, Hossein, Ali, Abdullah, and their 
variations, any one of which was more common 
in Persia than our familiar John, George, James, 
or Charles has ever been in America. When a 
letter was signed Mahmoud or Hassan, therefore, 
it was often difficult to tell, without investigation, 
which of a dozen individuals had written the let- 
ter. The titles granted by the Shah had served 
to some extent to remove the confusion; but the 
titles also bore a similarity one to another, and 
in some cases the same title was given to two or 
more persons. Accordingly, the Government 
some time ago provided that every Persian must 
take a family name. When we arrived in Persia, 
there were Persians who were known by their in- 
dividual names only, a larger number known by 
family names, and a host of others known only by 



their titles. The word Khan, formerly a tribal 
title, has become universalized in Persia and is 
found in the names of virtually all Persians high 
or low. The title Mirza, preceding a name, indi- 
cates an educated person and most of the govern- 
ment employees are Mirzas; but following the 
name, Mirza signifies a prince of the royal family, 
while Zadeh in that position has the same con- 
notation as the suffix in Johnson or the prefix in 
McDonald. A 8 eyed is a descendant of the 
Prophet; a Haji is one who has made the pil- 
grimage to Mecca. To a stranger accustomed 
to American family names, the use of titles 
as names seems of slight value in distinguishing 
one person from another, particularly as the 
Persian of the titles bore in some cases a strik- 
ing similarity ; for example, Nassir ol Molk, Nasr 
ol Molk, and Nassir os Saltaneh are three promi- 
nent Persians of different families. In addition 
to numerous civil titles, there were also a num- 
ber of military titles. Parliament, therefore, in 
its session of May 5, 1925, passed the following 

Article I. The National Consultative Assembly 
hereby annuls the following military titles and ranks: 
Sepahsalar, Sepahdar, Sardar, Sepahbod with or with- 
out a supplement — Emir-Nouyan, Emir-Touman, Emir- 
Pan j, as well as other titles that are followed or pre- 



ceded by words such as Sepah, Lashgar, Jang, Salar, 
Nezam and Emir. 

Abticli] II. No titles such as those stated in Article 
I shall hereafter be granted. 

Article III. All civil titles shall, after three months 
from the date of passage of this law, be annulled. 

Official ceremonials constitute a pleasant inter- 
lude in our work. The foreign employees of the 
Government appear with the Persians at official 
receptions, at the ceremony of opening the Maj- 
less, at the Shah’s reception at Now-Euz, and at 
the Court Salaams; and at most such times we 
wear over our frock-coats the djobbeh, a decorated 
robe with long, loose sleeves, and the kola, the 
ordinary black cap of the Persians. 

Naturally, an official of the Persian finances re- 
ceives many communications, written and oral, 
ranging from dignified and scholarly presenta- 
tions of fact to petitions which would be amus- 
ing if they did not also touch the heart. I have 
received more than one petition from peasants 
which, for lack of seals and signatures, have been 
subscribed by thumb-impressions in ink. Many 
such communications carry between the lines a so- 
cial or economic implication or a bit of human in- 
terest no less important than the intended mes- 
sage of the letter. I shall close this chapter by 
quoting exactly a letter of application written by 



a Persian in English. It is not given in any sense 
as a typical piece of Persian correspondence, but 
it illustrates fairly well a phase of our experience 
as well as a phase of Persian life. 

Your Excellency: 

This statement which it will kiss your honorable knee 
and lap, it is send from one old Pupiles of your scool 
in Teheran, who had been once an orphan having noth- 
ing in the world except God. His highness guide me 
to you little by little by good wish and kindness of your 
kind nation I became prosperous instructed and edu- 
cated. I know today English, medicine and Persian 
languages pretty well, so that which I have, I have from 
unlimited gracious and mercy of American people, 
therefore I am in debt to them through the close of my 
life, praying to God, to bless them, make them success- 
ful in their service, increase their spirituality, and sub- 
vert their bad wishers, and place most of nations under 
your authority and control like unto us, v 

My lord, I am sure in these few months you have un- 
derstand much more than ourselves about our poverty, 
wretchedness, and miserable condition, our present po- 
sition dejected me so much that I quit my medical prac- 
tice, obligely and with more difficulty I earn my daily 
bread by teaching [English] to the poor people of 
Resht. Your heartily witness will satisfy and content 
you the truth of my talk, God knows with a heart full 
of love and hope I desire to be received with you to your 
honorary service and serve you honestly as Interpreter 
or [secret explorer] at tributary office in Resht or 



Teheran or elsewhere, Hope your high position will not 
deprive me of this request as others did at the begin- 
ning. With complete humility I trust to your humanity 
and kindness. 




T he present chapter will carry our" story to 
the premiership of Reza Khan Pahlevi, 
beginning in October, 1923. During this 
period of about ten months there were three gov- 
ernments — ^those headed by Ghavam os Saltaneh, 
Mostowfi ol Memalek, and Muchir ed Dowleh — 
and four ministers of finance — Pahim ol Molk, 
Nasr ol Molk, Baha ol Molk, and Zoka ol Molk. 
The fourth Majless, which was in session on our 
arrival, came to an end on June 22, 1923.‘ The 
elections of the new deputies occurred in th,e sum- 
mer and fall, but the fifth Majless did not open 
until January, 1924. 

During most of this period, the American Mis- 
sion was at its full strength. Conditions in the 
Ministry of Public Works, however, required the 
presence of an American, particularly for the 
supervision of expenditures on the roads. Mokh- 
ber os Saltaneh, the Minister of Public Works, 
— ^wbo was friendly to us, — agreed to the transfer 
to that ministry of Mr. Mitchell, who is a civil 
engineer with experience in road-construction, to 



act as Director of Roads. A little later, the en- 
tire organization in the Ministry of Public Works 
devoted to the collection of road tolls was trans- 
ferred to the Ministry of Finance.^ In the late 
summer, Dr. Bogart, who had been employed for 
one year, returned to America, and Mr. Early, on 
account of illness, terminated his services. The 
American experts for the administration of 
Teheran municipality, through the untimely death 
of Dr. Ryan, also had virtually ceased to func- 

From the start, due to the decreasing number of 
the mission and to the addition of new services 
to the Ministry of Finance, the Americans have 
been forced from time to time to take on more and 
more work. Not one of my colleagues has ever 
demurred, although in a few months the burden 
that they bore was fairly staggering. 

The frequent changes of government tended to 
complicate our work. After the government fell, 
it was days or even weeks before its successor was 
completely formed and introduced to the Majless. 
During this time, we had no Minister of Finance, 
and although the under-secretary took the min- 
ister’s desk, he was not clothed with the power of 
approving expenditures. The passing of a prime 

lUpon the transfer of Mr. Mitchell to the Ministry of Public 
Works, Mr. Early became Director of Indirect Taxation, and 
Colonel MacCormack, along with his other duties, became Di- 
rector of Direct Taxation. 



minister or a minister of finance meant a period 
of partial paralysis. 

Nevertheless, we were able to proceed without 
interruption to the reorganization of the financial 
administration. Numerous transfers were made 
for the purpose of centralizing functions and re- 
sponsibility. In addition to the customs agents on 
the frontiers, there had been, in general, -two sets 
of finance representatives in the provinces: the 
financial agents in charge of disbursements and 
general collections, and the indirect-tax agents, 
reporting directly to the Administration of Indi- 
rect Taxation. The latter were now incorporated 
into the financial agencies, and the same action 
was taken somewhat later with regard to' the ali- 
mentation agents. After the departure of Mr. 
Early, in the fall of 1923, all the branches of the 
ministry having to do with the collection of inter- 
nal taxes or other sources of revenue, wefe con- 
solidated into the Administration of Internal 
Revenue, and Colonel MacCormack was appointed 
director of the new administration. 

The first ten months saw, on the whole, steady 
progress in our work; but the “honeymoon” of 
the mission was soon over. 

Opposition was of course inevitable, and it arose 
first in connection with questions of personnel. 
In its contract with me, the Government had 
agreed to follow my recommendations regarding 



the appointment, promotion, transfer, demotion, 
and dismissal of employees in the Ministry of Fi- 
nance and its various branches, and in the fiscal 
ofSces of the other ministries. The several min- 
isters of finance gave me much helpful advice, but 
they never refused to follow my recommenda- 
tions; and the responsibility for all such matters 
settled, of course, on my shoulders. The person- 
nel with which we had to deal shaded into various 
classes: the active employees who were appar- 
ently honest and competent ; those who were ap- 
parently dishonest or incompetent; the dispon- 
ibles who had good reputations, and the dispon- 
ibles who had in Persian parlance “spotted” 
dossiers. Many whose competency or honesty 
might be questioned had powerful friends or pow- 
erful enemies, while a few, for one reason or an- 
other, could be appointed or dismissed without 
causing a ripple outside the ministry. The Per- 
sians who were interested in our success took 
pains to impress upon us the extreme importance 
of selecting good men for our assistants, and 
those who advised us usually had from one to a 
score to recommend. Many Persians expected 
to see us inaugurate an immediate and general 
housecleaning, while others, indifferent to the per- 
sonnel in general, expected the appointment of 
their friends and the dismissal of their enemies. 
From the beginning it was our intention to deal 



with each personnel case on its merits, to disre- 
gard in appointments and dismissals any con- 
siderations of the personal or political influence of 
the candidate or of his friends or enemies, and 
never to act in such a matter solely on the recom- 
mendation of any one, even the Prime Minister, 
a minister, or a deputy. 

We included in the Civil Service Regulations a 
clause prohibiting the employees of the financial 
administration from participating in politics ; and 
when the elections were begun, we issued a special 
instruction warning the financial agents that they 
must not use their administrative powers for or 
against any candidates. There were numerous 
complaints, however, that financial agents and 
tax-collectors were interfering in the elections; 
and we had to be wary in handling these com- 
plaints, because in some instances they appeared 
to be prompted more by a desire to escape the 
payment of taxes than to preserve the non- 
partisanship of our civil service. The following, 
for example, signed by four names, was published 
in a Teheran newspaper: 

We, the undersigned, swear, and beg you to publish 
our declaration, that, at the time A. B. was Minister of 
Finance, the regions were sold. For Example, Shah- 
roud was sold for Ts 370 to C. D. and in return he has 
obtained about three thousand tomans from the people 
by force and now ... he has sent out men to get votes. 



Two of his men are working in the town and two oth- 
ers in the villages. Any place that gives more votes is 
free from payment of khanevari. 0 God ! King ! Dr. 
Millspaugh! Should not we farmers have freedom to 
elect our own deputies? We leave our houses and flee 
to Estrabad . . . 

Setting out to determine for ourselves the actual 
merit of various Persians whom we had never pre- 
viously known, we naturally acted slowly and dis- 
appointed most of those who were in any way in- 
terested in personnel. As soon as I was satisfied 
that an employee was unfit, I recommended his 
removal if there were a better man, unemployed, 
to take his place — scrupulously refraining from 
any inquiry regarding the family or political con- 
nections of either man. In making dismissals 
and appointments according to this plan, I was of 
course acting contrary to all the accepted rules of 
the political game; and it was not long before I 
had stepped on several very sensitive toes and 
two or three well-populated hornets’ nests. For 
example, an influential clerical wrote me in effect 
as follows : “You have in the last few weeks dis- 
missed my son and my two nephews, in fact all 
the members of my family who were working in 
the financial administration. Why do you show 
■such enmity toward my family?” With this par- 
ticular patriarch, I had two hours of discussion 
one morning before going to my office. I tried as 



best I could to mollify injured feelings. Fre- 
quently, I could cite a budgetary deficiency or an 
administrative adjustment that compelled the dis- 
missal ; in many cases there were specific charges 
of misconduct which required suspension and trial. 
In all cases, however, I pointed out that were the 
mission to act according to family or political in- 
fluence, the conditions in the Ministry of Finance 
would be precisely the same as before our arrival, 
when the head of the ministry had been subject to 
influence. Particularly difficult were the cases of 
those who were too old for active employment or 
who were honest but lacking in energy or technical 
fitness. It was difficult for those concerned to 
grasp the idea that, while aiming to be just, we 
were cold-blooded exponents of efficiency, not 
benevolent patrons of an old men’s home. . At the 
end of a few months, we had removed or trans- 
ferred most of the financial agents and many of 
the other employees and had appointed a number 
of the best disponibles ; and as soon as it dawned 
on the employees that we were seeking merit and 
were not moved by political or personal considera- 
tions, the morale and work of the employees be- 
came noticeably better. 

There was a question whether or not the under- 
secretary was legally an employee of the minis- 
try and covered by my contract. The under- 
secretary had no lack of information and energy, 



but, irrespective of the question of precedence, 
which had not been settled, he did not appear to 
be wholly sympathetic toward our purpose to ex- 
ercise our full powers. 

When I discovered, therefore, that he had or- 
dered the Customs Administration, without my 
knowledge or approval, to release about four hun- 
dred thousand tomans’ worth of cotton held by the 
Government to guarantee the debt of a bankrupt 
firm, I recommended his dismissal; and in his 
place the ministry appointed on my recommenda- 
tion Mirza Mohamed Ali Khan Farzin, who has 
served continuously since — an honest, experi- 
enced, and capable financial official who as par- 
liamentary under-secretary is particularly effec- 
tive when defending financial projects of law in 
the Majless. 

The disponibles, due to budgetary limitations, 
could not all be appointed. A number of them 
organized, started newspaper propaganda against 
the American Mission, brought pressure to bear 
on deputies, and intrigued with our enemies. The 
Civil Service Law provided for the payment to 
all disponibles of a percentage of their last sal- 
aries. During the first year, there was no provi- 
sion in the budget for this expenditure, and our 
refusal to make the payments naturally tended 
to increase the bitterness of the disponibles 
against us. 



The Civil Service Law, which was passed soon 
after our arrival and which took effect on the first 
day of 1302, brought down on our heads a double 
load of work and criticism. The law classifies 
employees into nine grades and fixes a minimum 
and maximum salary for each grade. The mini- 
mum salary of the first grade is thirty-two tomans 
a month ; the maximum salary of the ninth grade, 
three hundred and twelve. Provision was made 
in the law for the subaltern employees, those re- 
ceiving less than thirty-two tomans, who consti- 
tute about one half of the six thousand employees 
in the financial administration. Since it was im- 
possible at that time to re-classify the employees 
according to the work that they were doing, we 
fixed their grades and salaries to correspond as 
closely as possible with the salaries that they were 
then receiving. Absolute justice was out of the 
question, and there was, naturally, much dissatis- 

The Constitution prescribes that the construc- 
tion and regulation of the budget of the Govern- 
ment shall be subject to the approval of the Maj- 
less, and that the budget of each ministry shall 
be completed during the latter half of each year 
for the following year and shall be ready fifteen 
days before Now-Euz. The General Accounting 
Law prescribes that each minister must send his 
budget to the Ministry of Finance during the first 



three months of the year, and that the Minister of 
Finance, after centralizing all the ministry budg- 
ets, and adding the estimates of revenue, must 
send the completed budget to the Majless during 
the first days of the second half of the year, to be 
approved by the Majless, at the latest, fifteen 
days before Now-Ruz. In my contract, I was 
given authority to prepare the government 
budget; but in view of the existing constitutional 
and legal provisions, it appeared that my budget- 
ary duties began when the ministers had sub- 
mitted their estimates to the Ministry of Finance. 
Although I arrived in Persia in the eighth month 
of 1301, the Majless had not yet passed the com- 
plete budget of that year, and the ministry esti- 
mates for 1302 were not yet available. Fahim ol 
Molk, however, had already requested the various 
ministries to prepare their estimates of expendi- 
ture for the next fiscal year. After our arrival, a 
commission was immediately appointed in the 
Ministry of Finance to prepare estimates of rev- 
enue for 1302 ; and from the start, I insisted on a 
balanced budget — ^i. e., that the estimates of ex- 
penditure should not exceed the estimates of rev- 

The making of our first budget was a hurried 
and a hit-and-miss affair. There was no budget 
office in existence. The constitutional and legal 
provisions, regarding preparation and passing of 



the budget, while fairly good in principle, had 
never in practice been observed. The accounts of 
expenditures were incomplete and threw little 
light on the needs of the ministries. We had no 
time to make the necessary investigations. We 
therefore submitted to the Government our esti- 
mates of revenue and our suggestions, based on 
the budget of 1301, of the amounts that might be 
allotted to the various ministries in the follow- 
ing year, leaving to the ministers themselves the 
itemization of their expenditures. Our experi- 
ence with the budget would have taught us — had 
we not guessed it before — that official human na- 
ture is much the same in Persia as in other coun- 
tries, The ministers threw up their hands in 
horror at our allotments. They pleaded the ab- 
solute necessity of increased appropriations, and 
the impossibility of dismissing employees for the 
sake of economy. All accepted the principle of 
a balanced budget, but each expected other min- 
isters to do the pruning necessary to strike the 
balance. When the question of the budget be- 
came urgent, the Prime Minister was Mostowfl ol 
Memalek, a gentle, lovable individual, who had 
preserved through a long public career a distin- 
guished reputation for sagacity, integrity, and 
patriotism. He was in sympathy with the pur- 
pose of the American Mission and genuinely de- 
sired'financial reform, but, like any one else in his 



place, he hesitated to dictate to his ministers or 
to take decisions which would result in the dismis- 
sal of employees, or might in any other way alien- 
ate political supporters. Finally, however, the 
Minister of Finance and I discussed the matter 
in the Council of Ministers, and after some 
changes here and there which satisfied most of the 
ministers, the budget showing a balance between 
revenues and expenditures was sent to the Maj- 

The Chairman of the Budget Commission of the 
Majless was Soleiman Mirza, an experienced par- 
liamentarian, and its reporter, Firouz Mirza, a 
highly intelligent scion of an influential family, 
who was the generally recognized leader of the 
majority in the Majless. The budget proposals 
were handled by the commission with businesslike 
despatch, and were approved by the Majless with- 
out substantial change. Our first budget was sur- 
prisingly workable. The receipts approximated 
the estimates; with respect to expenditures, no 
supplementary credits were required; and at the 
end of the year the deficit was small compared 
with that of the previous year, and there would 
have been no deficit if we had not made large 
payments on arreared obligations. 

For the more elfective control of expenditures, 
we prepared and submitted to the Majless a pro- 
ject of law for the establishment of a Treasury- 



General which should be one of the coordinate ad- 
ministrations of the Ministry of Finance. This 
law, passed by the Majless on Feburary 25, 1923, 
provides that the Treasurer-General, until the 
termination of my contract, shall be designated 
by the Administrator-General of the Finances and 
must be an American official. The Treasurer- 
General is charged with receiving and. centraliz- 
ing all government revenues ; and he is permitted 
to disburse funds only upon requisitions which in 
the first place shall have been certified, with re- 
gard to their legality and budgetary credits, by 
finance officials having no connection with the 
Treasury-General, and in the second place shall 
have been signed by the Minister of Finance and 
myself. Penalties are provided in the law for 
failure on the part of any revenue-collecting of- 
ficial to deliver his receipts. 

Upon the enactment of this law, Mr. McCaskey 
was designated Treasurer-General and Mr. Gore 
was appointed the principal officer to pass on 
requisitions. When the organization of the new 
administration was completed, the Minister of 
Finance and I ceased to sign checks. Thereafter, 
disbursements were made, except for petty pay- 
ments, by checks on the Imperial Bank of Persia, 
over the signature of Mr. McCaskey, on the au- 
thority of requisitions signed by the minister and 
myself, previously certified by Mr. Gore. The 



financial agents were instructed by the Treasurer- 
General to remit all collections to the center and 
arrangements were made with the Imperial Per- 
sian Bank, as the depository of all public funds, 
to handle these remittances without charge. 

When the Administration of Indirect Taxation 
was returned to the Ministry of Finance, we 
learned that its budget for the year had already 
been exceeded, and we therefore suspended fur- 
ther payments to that administration until credits 
could be obtained. Receiving no salaries, a group 
of the employees threatened to strike, but we let 
them know that if any employee quit work he 
would be summarily dismissed. Although strikes 
have since occurred in other ministries, there have 
been none in the Ministry of Finance. 

A large part of the debts due the Government 
by Persians took the form of tax arrears. Our 
delay in pressing for the collection of these debts 
was criticized as due to lack of energy or cour- 
age, but it was deliberate. The records were in 
confusion and we wished to be sure of the facts 
before taking action. Moreover, it seemed ad- 
visable to get the routine work of the administra- 
tions in good running order before undertaking 
to make up for the shortcomings of the past. 
Finally, we wished to convince all Persians — par- 
ticularly those delinquents against whom we must 
proceed — ^that we were acting fairly and thought- 



fully, that we were carefully controlling the ex- 
penditure of all moneys collected, and that we in- 
tended to use in the general interest such control 
as we had over the public funds. Measured by 
Persian standards, the delinquent taxpayers were 
not bad men. None of them, probably, had lost 
many friends or much repute by reason of fail- 
ure to pay taxes. A Persian landowner could 
scarcely be blamed for dodging taxes at *a time 
when the public revenues were wasted and when 
the Government was giving the people a negligible 
return in public service. 

One of the delinquents was Sepahsalar Azam, 
an aged grandee, a former Russian protege, and 
a prime minister in the time of Shuster. When 
approached with regard to the payment of his ar- 
rear taxes, he invariably expressed complete will- 
ingness to pay, but advanced substantial counter- 
claims against the Government. We offered him 
a settlement involving an immediate cash pay- 
ment, the balance to be paid in instalments over 
several years and to be secured by the revenues 
of his villages. Finally, in the early summer of 
1923, having made no progress in our negotiations, 
we went to Reza Kahn Pahlevi and asked for his 
assistance. Armed with his promise of support, 
we made a final appeal to Sepahsalar. Finding 
him as obdurate as ever, we ordered the finan- 
cial agents to seize his properties. This action 



brought him to time, and an agreement for a 
settlement of his debt was entered into with 
him. This agreement took into consideration 
his counter-claims and gave him the privilege of 
paying in instalments. 

Having settled with Sepahsalar Azam, we next 
proceeded against the powerful Bakhtiari khans, 
and succeeded by much the same methods in reach- 
ing an agreement with them. In the meantime a 
circular had been issued to the financial agents, 
instructing them to proceed vigorously to the col- 
lection of all tax arrears due in their districts, 
laying down the simple general rule that each year 
a taxpayer in arrears should pay an amount on 
arrears equal to his current taxes. As the army 
made progress in pacifying the tribes and bring- 
ing rebellious local leaders under control, wo es- 
tablished new sub-agencies and took steps to col- 
lect the current and arrear taxes. In Azcrbaidjan 
and Khorassan, Mr. Jones and Major Hall were 
proceeding with success along the lines laid down 
in the center. The agreements relative to tax ar- 
rears have been in the main carried out with no 
great difficulty. 

The collection of taxes was vital to our success ; 
but I am certain that we should have failed in this 
regard, — in spite of the energy, tact, and resource- 
fulness of Colonel MacCormack’s direction of the 
Internal Revenue Administration, — had it not 



been for the existence of a strong army and the 
willingness of Beza Khan Pahlevi to cooperate 
with us. The Minister of War had the statesman- 
ship to perceive that, with respect to the collection 
of taxes, the interests of the army and of the Min- 
istry of Finance were identical. As Minister of 
War, he was in a position to disregard the politi- 
cal influence of the taxpayers. Even in. the nu- 
merous oases when it was unnecessary to call on 
him for direct assistance, the public knowledge 
that his power was behind us was sufficient, usu- 
ally, for the collection of the taxes. 

Successful in the collection of arrears, the Ad- 
ministration of Internal Revenue had also made 
progress toward bringing system into the col- 
lection of current taxes. In my sixth quarterly 
report, I published a list of twenty forms which 
had been adopted, covering virtually every feature 
of internal-revenue administration. 

In the summer of 1923, however, we reached a 
crisis in the collection of the opium-tax. Opium 
cultivated in Persia was subject to the ordinary 
land-tax, or ten per cent, of the net share of the 
proprietor. According to the Persian law, all 
opium for smoking is subject to banderoling, for 
which is charged a tax of 672 krans a batman. In 
addition to the banderole tax, there were also col- 
lected manipulation fees, warehouse charges, 
transport charges, and customs duties on im- 



ported and exported opium. The above taxes and 
charges presuppose effective control of the opium 
industry by the Government ; and it had been the 
effort of the Government to exercise its control 
by centralizing in government warehouses, under 
the supervision of government inspectors, the 
preparation of the opium for commerce. In the 
year before our arrival, only twenty per cent, of 
the opium sap produced in Persia had been 
brought under this necessary control. In other 
words, almost one half of the opium had been 
contraband and had largely escaped taxation. 
The most important of the illicit transactions con- 
sisted of smuggling within the country, for local 
consumption. The smuggling business was highly 
organized, as is shown by the fact that in 1923 one 
smuggling transaction was discovered in which 
the contraband stuff was guarded in transit by 
one hundred and fifty horsemen. It was clear to 
us that the extension of opium centralization, diffi- 
cult as it might be, was imperatively necessary in 
order to increase the revenues and to establish a 
measure of government control over an industry 
which public sentiment condemned and which must 
eventually be restricted. 

Isfahan, the center of opium-cultivation, had 
thus far escaped centralization. Even when the 
Ministry of War was collecting the indirect taxes, 
it had tried and failed in Isfahan. Conditions 



there presented peculiar difficulty. Out of a popu- 
lation of approximately eighty thousand, there 
were at least five thousand who gained all or a 
large part of their income through the commerce 
in opium. These included opium-peddlers, bro- 
kers, bazaar traders, commission and export mer- 
chants, packers, porters, coppersmiths, and the 
manipulators of stick and cake opium. , If we 
assume an average of three dependents, which is 
low, it will be seen that at least a fourth of the 
entire population of the city was largely depend- 
ent on the opium trade. The above figures, more- 
over, do not include the opium-cultivators resident 
in or near the city. The wide diffusion of the 
trade and the multitude of small transactions in- 
creased the difficulty of centralization. During 
the harvest, peddlers and small storekeepers, who 
have advanced goods on credit to the peasants 
during the year, go to the villages and secure their 
payment in opium sap. Occasionally, at this time, 
gifts of sap are made to the village mullahs ; and 
the village barbers and carpenters are paid for 
their services in the same medium. As soon as 
the gathering of sap begins, thousands of venders 
of small articles and sweetmeats go out from the 
large towns and barter their wares for sap, in the 
poppy fields. Dervishes, story-tellers, beggars, 
musicians, and owners of performing animals go 
from one field to another, and are rewarded or 



given alms by having the flat side of the opium 
knife scraped on their palms, or on the small bowls 
carried by the dervishes. These itinerants sell 
their accumulations to traveling opium-buyers, 
who also purchase from the peasants. When it is 
realized that there may be easily from three to five 
thousand strangers in a single area during the 
harvest season, each with opium sap in his or her 
possession, the difficulty of centralizing the entire 
crop becomes apparent. As most of these people 
depend on their gains, during this season, for a 
considerable portion of their annual income, the 
hardships imposed on them by complete central- 
ization may also be conceived. When the pro- 
prietors and peasants are required to place all 
their sap in the warehouses as soon as gathered, 
thousands of these more or less legitimate middle- 
men are deprived of their occupation. 

Early in 1923, we had instructed the financial 
agent of Isfahan to prepare warehouses and to 
establish centralization, but he immediately en- 
countered opposition. Hundreds of people took 
bast in the telegraph office and wired protests to 
the Government ; demonstrations took place in the 
streets ; peasants were brought in from the coun- 
try; armed resistance seemed likely. After des- 
patching to Isfahan a tax expert who telegraphed 
to me advising that we should yield to the Isfahan 
opium merchants, I sent Colonel MacCormack, 



who, except for instuctions to remove so far as 
possible the legitimate grievances of the people 
and to stand firm on the principle of centraliza- 
tion, was given a free hand to work out, on the 
ground, a solution of the problem. He found the 
city in a turmoil, peasants demonstrating in the 
streets, the financial agency paralyzed and ready 
to surrender, and armed resistance threatening. 
The Government feared serious trouble, but I was 
completely confident that it could, if it would, 
overcome the opposition.' Accordingly, I sub- 
mitted to the Council of Ministers a telegram from 
Colonel MacCormack in which he stated that he 
had put into eifect various measures designed to 
remove the legitimate grievances of the people, 
and asked for an assertion of the authority of the 
Government. The Prime Minister, who was then 
Muchir Dowleh, and the Minister of War took the 
wise and strong course. The former telegraphed 
the governor to cooperate with Colonel MacCor- 
mack, and gave the people to understand that the 
Government had no intention of yielding; the lat- 
ter ordered the military commander at Isfahan to 
use military force, if necessary, to keep the peace. 
There was for a few days some rioting in the 
streets of Isfahan and five peasants were killed; 
but, due to the firmness displayed by the Govern- 
ment, the centralization of opium in Isfahan was 
for the first time successfully instituted. 


Amkkicaxs IX (Ijohheh axi» kola aptkh tub openixij of tub Majlbss, 
Jaxuauv 20 , 1024 . FrtoM left to kioiit, Mr. MorASKBV, Dr. Mills- 
PAUCH, AND Colonel MacCormack 


Following our victory there, centralization was 
carried out in other regions, and at the end of the 
year two thirds of the opium-production of the 
country had been centralized in government ware- 
houses, with a satisfactory increase of revenue as 
compared with the previous year. 

This affair, which recalls to mind the famous 
“Whisky Rebellion” in American history, was one 
of our decisive battles. Had we or the Govern- 
ment yielded, the prestige of the American Mis- 
sion, as well as that of the Government, would 
have been seriously impaired ; resistance in other 
quarters and with respect to other matters would 
have been encouraged ; and the efforts to establish 
throughout the country respect for the authority 
of the Central Government would have received 
a serious setback. After experiencing centrali- 
zation, the proprietors and peasants, as they came 
to realize that they were receiving the profits 
which formerly went to middlemen, were less op- 
posed to our policy ; and in the following year we 
encountered no serious difficulty with regard to 

Concurrently with our tax-collection efforts, the 
development of our work in other directions had 
presented difficulties and aroused antagonisms. 
We set out to enforce the financial laws, including 
the new Treasury-General law ; and the examina- 
tion that we gave to requisitions and the restric- 



tions that we placed on payments led to an endless 
succession of complaints or differences of opinion. 
Mr, Gore, as Director of Accounts and Audits, did 
not court popularity, and, no respecter of persons 
himself, he earned the wholesome respect of all 
Persians by his strict, impartial adherence to the 
law. Appeals were made to me daily on the 
ground that Mr. Gore was “creating difficulties” 
by his interpretation of the laws ; but on investi- 
gation, I found, in virtually all cases, that Mr. 
Gore had been right and that the “difficulty” ex- 
isted in the law itself or in the idea of some claim- 
ant that we could stretch the law to meet his par- 
ticular case. But with regard to the large claim- 
ants, we could do nothing during the first year 
except complete the dossiers. 

We also encountered difficulty in the application 
of the Treasury-General law to the Ministry of 
Posts and Telegraphs. In the past, as I have ex- 
plained in a previous chapter, that ministry had 
paid its expenses directly from its revenues. The 
Treasury-General law prescribed, however, that 
all government revenue should be covered into 
the treasury and no disbursements should be 
made except out of funds procured by requisition 
on the Ministry of Finance. Some of the officials 
of the Ministry of Posts and Telegraphs, notably 
the under-secretary who headed the political ma- 
chine in that ministry, had reason to object to any 



scrutiny or pre-audit of their expenditure. Apart 
frona their real reasons, they alleged that observ- 
ance of the law would lead to delays which, in the 
case of the salaries of technical employees and the 
purchase of forage for the horses used in mail 
transport, would result in administrative demoral- 

We undertook also to centralize the purchase of 
government supplies. With the execution of the 
budget of 1923-24, we established a General 
Supply Section under the direction of Mr. Gore, 
in which was centralized the purchasing of all the 
civil supplies of the Government. Through stand- 
ardization of equipment, prevention of over- 
charging, repair of furniture, and the execution 
of contracts for large quantities by public bidding, 
we effected economies and reduced opportunities 
for graft; but incidentally we incurred the hos- 
tility of the supply officers, merchants, and others 
who had profited from the loose practices that had 
existed in the past. 

The summer of 1923 witnessed a more or less 
concerted and wide-spread attack on the American 
Mission, from the elements that were affected by 
our reforms. A few of the less important and 
more venal newspapers launched a campaign of 
persistent and scurrilous misrepresentation, 
partly purchased propaganda and partly black- 
mail. In these articles we were generally criti- 



cized as incompetent and stubborn bunglers, who 
by ill-considered action had thrown the finances 
into chaos. Beyond an occasional retort in my 
quarterly reports, we thought it best to meet these 
attacks with silence. We were sure that a large 
majority of the best Persians were with us; and 
that the attacks were the vocal repercussion of 
reform measures which, whatever the opposition 
might be, could not have been postponed or aban- 
doned ; and we had no doubt that with the support 
shown by the Prime Minister and by the Minister 
of War, the mission was in no serious danger. 
Thanks to the cooperation of the Imperial Persian 
Bank, we made payments pretty regularly, par- 
ticularly to the army, and we also found time to 
contribute a little to economic development and 
public welfare. 

We insisted that the subsidies to the Urumiah 
refugees in Teheran should stop, and made ar- 
rangements to pay their travel expenses back to 
their homes. All of the refugees eventually left 
Teheran, and it is presumed that most of them re- 
turned to their homes. At the same time, we 
obtained a credit from the Majless for the relief 
of the devastated districts. Mr. Dunaway was 
sent to Urumiah, and made loans to the land- 
owners to the amount of about fifty thousand to- 
mans for the purchase of oxen and seed and the 
repair of buildings. Later, when we had reached 



an agreement with Toumaniantz Freres for the 
rehabilitation of their business, we recovered the 
sum of about fifty thousand tomans which had 
been deposited with them, and distributed that 
sum likewise in the devastated regions. 

We likewise controlled the expenditure of funds 
contributed for the earthquake-stricken region of 
Torbat; the repair and construction of public 
buildings was resumed; we proposed a loan- 
service institution to save needy people from the 
grip of loan sharks; we undertook campaigns 
against insect pests ; we eontributed so far as pos- 
sible, in a variety of ways, to agricultural relief ; 
the regularity of payments heightened the morale 
of the school-teachers, the public, the sanitary 
services, and other branches of the Government. 

Foreign questions necessarily remained more 
or less in abeyance through the year. Little 
could be done with regard to foreign protests 
against the navaghel ; and, through no fault of the 
Persian representatives, the discussions with the 
Soviet Legation on the tariff, which began in June, 
1923, came to naught. The question of the north- 
ern oil concession and the proposed ten-million- 
dollar loan in connection with it, was clarified 
through the acceptance by Sinclair, with some 
modifications, of the terms fixed by the Majless. 
The fourth Majless, at the very end of its session 
in June, 1923, had passed an act authorizing the 



Ministry of Finance to negotiate a loan of five 
million dollars with American banks, but no active 
steps were taken for the flotation of this loan. A 
flurry in international relations was created in 
August, 1923, by the expulsion of a number of 
Persian mujtahids from Iraq. 



I N October, 1923, there was a marked clear- 
ing of the political atmosphere. The gov- 
ernment of Muchir ed Dowleh fell; Reza 
Khan Pahlevi became Prime Minister; the Shah 
departed again for Paris; and Ghavam os Sal- 
tanch, former Prime Minister, after a quick set- 
tlement of his personal affairs, left for France. 

I shall make no attempt to set forth or inter- 
pret the feelings, fears, rumors, intrigues, or 
intentions that motivated or were alleged to 
motivate events. It will be sufficient for the pur- 
pose of my story to call attention to the signifi- 
cance of the central fact — the assumption by Reza 
Khan Pahlevi of the premiership. 

As he explained it in simple words to me, he 
had seen that other governments had been unable 
to do anything for the country and he had re- 
solved to devote his power and his energies to 
the task. 

Since 1921, he had been the one man in the 
country whose strength had rested on a founda- 
tion more solid than the shifting sands of politics. 



Theoretically, it seemed a distinct advantage, 
therefore, that the personal authority which had 
hitherto been indirectly exercised should now be 
squarely placed in its appropriate constitutional 
position, and that the responsibility which had 
hitherto been obscured by that of prime ministers 
and shared with other ministers should now be 
clearly and officially concentrated in the person 
who appeared at the time most capable of effec- 
tive popular leadership. There seems little ques- 
tion that Beza Khan Pahlevi possessed not 
merely the devotion of his army but also the 
confidence of the people. He was the natural 
rallying-point of nationalism; he was the logical 
leader and therefore marked to bear the symbol 
of leadership; he was the best hope of the coun- 
try. Through much of the apparently artificial 
and insincere acclamation that greeted his acces- 
sion, sounded a genuine note of popular approval 
and enthusiasm. Soon after his elevation to the 
premiership, a reception was given him in Tehe- 
ran at the house of a wealthy merchant, Moin ot 
Tojjar. Addresses were presented to him, poems 
were read, fireworks and illuminations lit the 
eager faces of the throng in the garden outside ; 
but through it all the new Prime Minister seemed 
modest and serious. All of his statements on 
such occasions were patriotic and statesmanlike. 
He continued to transact business at his simple 



office in the Ministry of War and at his house, 
which is one of the least pretentious in Teheran; 
the Council of Ministers moved to the palace in 
order to give its former quarters to the Ministry 
of Public Works, a change dictated by considera- 
tions of convenience; the ministers, electrified by 
their unique leadership, began to work as Per- 
sian ministers had never worked before; every 
one was inspired by the idea that big things 
should and could be done for the country. 

The citation of a few of the early acts of the 
Prime Minister may point the direction that his 
thoughts were taking. He instructed that the 
elections should be hastened in order that the 
Majless should meet as early as possible; he 
formed a commission to report a uniform system 
of weights and measures ; on his orders all of the 
beggars were summarily removed from the 
streets of the capital and lodged in a municipal 
institution; he issued a proclamation denouncing 
as unbecoming and unpatriotic the practice on the 
part of Persians of frequenting the foreign lega- 
tions for advice with regard to the internal af- 
fairs of Persia; he gave forty thousand tomans 
from the reserve fund of the Ministry of War for 
the purchase of buildings for a new national uni- 

In refutation of wild rumors that he would ap- 
point military officers as his ministers, he selected 



only two; Khoda Yar Khan, to whom fell the 
Ministry of Posts and Telegraphs, an adminis- 
tration that was clearly in need of an iron hand, 
and Amir Eghtedar, Minister of the Interior, 
who at Isfahan had rendered valuable assistance 
to the American Mission. For the Ministry of 
Finance, he selected Modir ol Molk, a civilian 
politician, who had already served as Minister of 
Finance and of Foreign Affairs, and who was at 
the time Colonel MacCormack’s assistant in the 
Alimentation Service. Zoka ol Molk, a distin- 
guished jurist, then Minister of Finance, became 
Minister of Foreign Affairs. Soleiman Mirza 
and Moazzed os Saltaneh took charge of Public 
Instruction and Justice respectively. Ezz ol Me- 
malek, then an inspector of the Ministry of Fi- 
nance, was named Minister of Public Works. 

The change in the official position of Reza Khan 
Pahlevi naturally tended to complicate his rela- 
tions with the American Financial Mission. He 
was now in politics as he had never been before; 
and in politics, one must listen to complaints, 
placate opposition, and extend favors to those 
who possess influence. Formerly Reza Khan 
Pahlevi had been in much the same independent 
and neutral position as that of the American 
Mission itself. Any unpopularity occasioned by 
our financial measures or by giving support to 
them Was likely to fall on the Government rather 



than on the Minister of War. Now, when the 
Minister of War was also the head of the Gov- 
ernment, there w;as grave danger that the Samson 
who had supported us should be eventually shorn 
of his strength by the Delilah of politics. When 
he was only Minister of War, our work concerned 
him chiefly as it affected the functioning of the 
army. As Prime Minister, he must perforce be 
concerned with the budget, with taxation policy, 
with alimentation, with the payment of claims, 
with the Bank-i-Iran, and with a thousand mat- 
ters of detail which, as they were brought within 
the range of his impulsive, direct, and decisive 
mentality, inevitably created a first impression 
that the finances were disorganized, that we were 
slow and inefficient, that in spite of many motions 
we were, like windmills, getting nowhere, and that 
we were tactlessly sowing seeds of discontent 
among the people. Under the best of circum- 
stances, we could not expect to be popular; and 
although the storm of the summer of 1923 had 
passed without doing any perceptible damage, 
hostility to the American Mission was still in- 
tense in many quarters and there were numerous 
elements who looked at the latest turn of the 
political wheel as an opportunity for the renewal 
of their criticisms and propaganda. 

The new intrigues, which took on appreciable 
proportions in the fall of 1923, apparently had 



as their purpose the embarrassing and discredit- 
ing of the American Mission, with the aim of de- 
priving us of our essential powers and ultimately, 
if we became unpopular enough, of driving us out 
of the country, A subtle campaign was insti- 
tuted to start a quarrel between the Prime Minis- 
ter and myself. I was told almost daily that 
Beza Khan had decided to get rid of the American 
Mission ; he was told that we were destroying the 
prestige of the army and that under the cloak of 
financial laws we were defying his authority and 
creating disrespect for it. Petty differences, an- 
noying to both of us, occurred continually, which 
if it had not been for the enemies of the mission, 
would never, I am confident, have appeared in a 
form to require even casual discussion. In order 
to banish any hope of support from the Majless, 
I was told that that body, when it met, would be 
the pliant tool of the Prime Minister, because of 
influence exercised by him over the elections, and 
that one of its first acts, if it should by chance 
not be immediately dissolved, would be to con- 
sider the question of the continuance of the Amer- 
ican Mission in Persia. 

With the departure of Mr. Early in the fall of 
1923, the Financial Mission, with only nine mem- 
bers, was left short-handed. While the members 
of the mission in the capital willingly assumed 
additional duties, there were only two Americans 



serving in the provinces, and accordingly Mr. 
Flannagan was sent as financial agent to Yazd 
and Mr. Dunaway as provincial director to Ham- 
adan. Finally, with the designation of Mr. Pear- 
son as Director of Personnel, I was left with no 
American secretary or stenographer. 

Early in March, 1924, a movement started for 
the establishment of a republic. The movement 
was a blend of anti-dynastic, progressive, mod- 
ernistic, and nationalistic sentiments, galvanized 
into action and given concrete form by the popu- 
larity of Reza Khan Pahlevi, who was universally 
viewed as the prospective first president of the 
republic. The example of Turkey probably had 
influence. Except in some irresponsible quar- 
ters, the movement never took on a really revolu- 
tionary aspect, and, it was not, in my opinion, in 
any sense symptomatic of a trend toward Bol- 
shevism. The press of Teheran became ram- 
pantly anti-monarchical; telegrams advocating a 
republic poured in from the provinces; peaceful 
demonstrations occurred; government oflSees were 
closed in the provinces; and at Teheran em- 
ployees left their work and presented addresses 
to Reza Khan. The latter pointed out to at least 
one delegation that the form of government in 
modern times is not an important matter; that 
there were certain backward and badly governed 
republics, while there were progressive and well- 



governed monarchies; and that his only desire 
was to make his country progressive and well 
governed whatever the superficial forms of gov- 
ernment might be. Nevertheless, when the move- 
ment had gathered momentum and doubtless 
seemed to him to represent a spontaneous and 
unanimous expression of popular feeling, he be- 
came quietly and dignifiedly receptive. .For a 
time, it appeared that the establishment of a re- 
public was certain; but after a prolonged discus- 
sion in the Majless, where the Opposition was led 
by Modarres, it was decided that the change of 
government should not t^e place. The Prime 
Minister showed good sportsmanship; and the 
agitation had stopped by the first of May. 

During the course of this interesting move- 
ment, the American Mission followed its policy 
of strictly abstaining from any participation in 
political matters. I declined to express' any 
opinion on the question; and when some em- 
ployees came to mo in regard to their going in a 
body to the Prime Minister to voice their support 
of republicanism, I told them that I was neither 
for nor against any Persian political movement, 
and that they must as Persian citizens use their 
own judgment. I did take occasion to point out to 
the Government that the closing of financial agen- 
cies and the general political manoeuvering in the 
provinces would cause a serious loss of revenue, 



and in the budget an amount of about one hundred 
thousand tomans was later deducted, on this ac- 
count, from the estimates of revenue. 

I was naturally apprehensive, also, that the 
news of the movement when transmitted to for- 
eign countries might create an impression which 
seemed to me wholly contrary to the facts — ^that 
instability and disorder existed in Persia. In 
view of the withdrawal of the proposal of another 
American company, the Prime Minister had de- 
cided to grant the northern oil concession to the 
Sinclair Exploration Company ; and a representa- 
tive of an American banking firm came at this 
juncture to Persia, to make the preliminary in- 
vestigations regarding a loan to be floated as a 
condition of the concession. He was followed 
shortly afterward by the representative of an 
American construction company which was inter- 
ested in the prospective expenditures from the 
proceeds of the loan. Other foreign companies 
also were showing revival of interest in Persia. 
The time did not seem propitious for a political 
diversion. My view, however, would have been 
precisely the same toward a Presidential election, 
a cabinet crisis, or any other political develop- 
ment which tended to suspend the normal course 
of affairs and to divert public attention from 
financial and economic matters. 

The budget, our perennial crop of thorns, was 


daring this period particularly prolific of trouble. 
Prior to the meeting of the Majless, the prepara- 
tion of the budget for 1923-24 had reached a stage 
where it became clear that if we were to effect a 
balance, including provision for the repayment of 
a part of the advances from the Imperial Persian 
Bank, it would be necessary to find new revenue 
amounting to a million tomans. 

As in the previous year, the ministers wanted 
increased appropriations to meet their expanding 
needs, and some of the proposed increases seemed 
necessary. Accordingly, we prepared a number 
of tax projects, including a chancellery tax, a tax 
on delinquent taxpayers, an income-tax, a tax on 
negotiable instruments, an extension of the rental 
tax, and a sales-tax, with the idea that these 
taxes would be approved by the Majless prior to 
or in conjunction with its approval of the budget. 

These tax projects were the first proposals that 
we had made looking to the increase of revenue 
and the reform of taxation by legislative enact- 
ment. Our aim in these proposals was to intro- 
duce more elastic taxes, to distribute the burden 
of taxation more equitably, and to pave the way 
for the abolition of some of the existing taxes, 
such as the various archaic local imposts, the 
road-tolls, the navaghel collected at the city gates, 
and eventually, with the restriction of opium- 
cultivation, the opium-taxes. In the sales-tax bill 


Agha Skyed IIassan Modaiiues, Leading CLEUirAL Deputy 


we proposed, in fact, the abolition of about two 
hundred existing taxes. We hoped to establish 
sources of revenue which, while not abundantly 
productive at first, would in the course of time 
provide sufficient funds for transportation devel- 
opment, for agricultural reconstruction, for the 
extension of educational and sanitary facilities, 
for the gradual payment of claims, and possibly 
for the purchase of pensions. We were also pre- 
paring a new project providing for a uniform 
system of land-taxes. 

In the beginning, we had realized, of course, 
that tax proposals, even if we had had time to sub- 
mit any to the fourth Majless, would not have been 
acceptable. The American Mission was an ex- 
periment; and the Majless was not inclined to 
vote more taxes without assurance that their dis- 
position would be properly controlled. More- 
over, the people were complaining of the existing 
taxes, and could not be expected to favor meas- 
ures which would add to their burdens. 

Mohamed Ali Khan Farzin, the under-secre- 
tary of the Ministry of Finance, was the only 
official who advised me not to submit proposals 
for new taxes in connection with the budget. 
Had I followed his wise advice, much of our later 
difficulties with the budget would have been ob- 
viated. On the other hand, the American Mission 
was being generally criticized for its rigorous 



collection of taxes, and for not accomplishing any 
constructive work. The existing taxes, even with 
the increase we had obtained administratively, 
were inadequate for the normal governmental 
needs of the country and offered no opportunity 
for relief to taxpayers or for constructive, social, 
and economic undertakings. Persians protested 
the illegality of some of them; foreign legations 
held that others conflicted with the treaty rights 
of their nationals. The oil royalties were de- 
creasing. The negotiations with Russia regard- 
ing the tariff had been thus far without result. 
The new Majless was an unknown quantity and 
it seemed to me that there was a fair chance that 
it might, when it saw the exigencies of the situa- 
tion, provide the fiscal assistance which we needed. 

After much discussion with the ministers, the 
budget was submitted to the Majless, with the tax 
proposals, in the second month of the Persian 
year. The Budget Commission promptly decided 
to strike out tlie new taxes and to balance the 
budget by reducing the expenditure items. A 
proposal to reduce expenditures by cutting down 
salaries was debated. Week after week, through 
the spring into the hot summer months, the dis- 
cussions went on. Various features of the 
budget, which did not seem important to the com- 
mission, appeared vital to me. It was impossible 
for my interpreter to give me the discussions in 



full, and it was therefore difiScult for me to ap- 
preciate the point of view of the deputies or to 
understand the subjects on which they desired 
further information. They seemed to me to 
be dilatory, obstructive, and unreasonable. I 
seemed to them to be lacking in helpfulness, ob- 
stinate, and equally unreasonable. 

Finally after three and a half months of dis- 
cussion, the commission returned the budget to 
the Government for revision. 

In the meantime, having bound ourselves to the 
principle of making no payments without parlia- 
mentary authorization, we found ourselves in 
serious embarrassment on account of the lack of 
credits. Lacking a voted budget for the year, the 
Government each month asked the Majless to 
grant a credit equal to one twelfth of the appro- 
priations of the previous year. The delay in 
passing these monthly credits prevented us from 
making payments promptly, and caused losses of 
revenue due to our inability to make the expendi- 
tures which were in some cases necessary for 
collection purposes. 

Our troubles with the Ministry of Posts and 
Telegraphs became aggravated. The under- 
secretary of that ministry now made no pretense 
of observing the financial laws; but having suffi- 
cient receipts, he was able to satisfy the em- 
ployees of his ministry by paying their salaries 



promptly and regularly. We were, of course, 
less interested in his political machine than we 
were in the enforcement of the laws and the econ- 
omizing of expenditure. My recommendation 
that a Persian employee of the Ministry of Fi- 
nance should be appointed Chief Accountant and 
Controller of the Ministry of Posts and Tele- 
graphs was, however, disregarded. I then laid 
the matter, in writing, before the Prime Minister 
and informed him that, since we were powerless 
to force the Ministry of Posts and Telegraphs to 
observe the law and my contract, I should be com- 
pelled, unless the Government gave me support 
in this matter which seemed vital to our success in 
controlling expenditures, to deduct from the 
budgetary payments to the Ministry of War a 
part of the amount which was estimated as losses 
in the Ministry of Posts and Telegraphs. 

A similar situation existed in the Municipality 
of Teheran, which was outside the budget of the 
Government and which contended that it was like- 
wise outside the terms of my contract. Dr. Ed- 
ward W. Ryan, who was employed by the Persian 
Government as municipal expert, had begun ener- 
getically to reform the city administration and 
had borrowed 250,000 tomans from the Imperial 
Persian Bank for the completion of the municipal 
building and the repair of the streets. His un- 
timely death in September, 1923, again threw af- 



fairs into confusion; but some months later, the 
Prime Minister ordered the chief of the munici- 
pality to submit in fiscal matters to the control of 
the Ministry of Finance. 

With the republican movement out of the way, 
a veritable storm of criticism broke upon us in the 
Majless and in the newspapers. Speeches were 
directed at us in the Majless, and the inability of 
the Minister of Finance to give prompt and de- 
tailed information in reply to the numerous ques- 
tions of the deputies served to create an atmos- 
phere of distrust. The criticism was expressed 
that we were deliberately keeping the minister in 
ignorance. In and out of the Majless we were 
charged with various high crimes and misde- 
meanors, namely: with maintaining an excessive 
budget for the Ministry of Finance; with receiv- 
ing advances from the bank, contrary to the Con- 
stitution; with failing to reorganize the financial 
administration ; with collecting taxes illegally and 
oppressively; with delays in the conduct of the 
correspondence of the ministry ; with treating the 
disponibles contrary to the Civil Service Law; 
with irregularities in the purchase of supplies; 
with failing to adapt ourselves to the mentality 
of the Persian people; with disregard of the re- 
sponsibility of the Minister of Finance ; with main- 
taining an unnecessary number of interpreters 
and translators; with having too many high- 



salaried officials ; with dismissing honest men and 
appointing dishonest ones; with lack of expert 
knowledge; and with general incompetence. 

We were not so much concerned with the criti- 
cisms in themselves as we were with their signifi- 
cance and effect. If the attacks in and out of 
Parliament represented the real attitude of the 
Government and Parliament, and if this attitude 
could not he changed, then the situation boded ill 
for the success of our mission. Continued public 
attacks by deputies, concurrent with the other 
conditions which I have mentioned in this chap- 
ter, appeared certain to diminish our prestige, 
to weaken our control over the personnel of the 
financial administration, and to lend encourage- 
ment to all who were resisting the collection of 
taxes or claims. 

Therefore, deciding to ask the Government for a 
definite indication of its purposes, we addressed, 
late in July, 1924, a letter to the Prime Minister 
in which we called attention to our difficulties and 
to violations of our contracts, and stated that 
unless conditions were changed, there appeared 
to be little hope for the accomplishment of our 

Shortly after, a tragic event occurred which 
profoundly shocked the foreign community and 
the Persian people. As I was dining one evening 
late in July with the Minister of Finance in the 



garden of the Iran Club at Gulehek, word was 
brought that the American Vice-Consul Robert W. 
Imhrie had been killed by a mob in the streets of 
Teheran. On the following day, we attended his 
funeral at the American Missionary Church. 
The Prime Minister with his Cabinet was present, 
and the dead American official was accorded full 
military honors. 

During the course of a few days the fog of 
rumors lifted and the facts became fairly clear. 

Major Imbrie, with a companion, — a former 
American employee of the Anglo-Persian Oil 
Company, who had been convicted of assault and 
sentenced to a year’s imprisonment at the con- 
sulate, — drove in a carriage to a shrine in one of 
the crowded streets near the center of Teheran. 
The shrine, like many others in the city, was in 
the form of a small drinking-fountain set up at 
the side of the street. Reports that a miracle had 
occurred a few days previously at this spot at- 
tracted to it a crowd of credulous people of the 
lower classes, who, stirred by the faith that 
brought them there, were in no mood for toler- 
ance or understanding. The tense emotionalism, 
even fanaticism, manifested at such an excep- 
tional place did not of course represent the 
thoughts of the whole population, and a foreigner, 
although feeling perfect security in general, 
should have realized the extreme danger, with 



respect to any religious manifestation, of provoc- 
ative action or inappropriate intrusion. Major 
Imbrie, however, when he reached the shrine, did 
the one thing which was most likely to cause 
trouble. He attempted to take a photograph of 
the shrine and the near-by group of Persians, 
among whom were some women. The conse- 
quences were tragic : warnings, cries that Major 
Imbrie had put poison in the fountain, menaces, 
and — after the vice-consul with his companion 
had gained his carriage and driven away — a long 
pursuit through the streets, and finally a mur- 
derous mob attack, wliich resulted in the death of 
Major Imbrie and serious injuries to the other 

Altogether, the skies seemed dark in midsum- 
mer of 1924. 

Nevertheless, our work continued to show prog- 
ress. The reorganization of the financial admin- 
istration proceeded step by step. Foreign trade 
and customs revenues were steadily growing; and 
all internal taxes were showing an encouraging 
increase, amounting for the first six months of 
the year to a half-million tomans as compared 
with the corresponding period of the previous 

In November, 1923, Colonel MacCormack with 
three Persian assistants had proceeded to Khozi- 



stan and had concluded a settlement with Sheikh 
Khaz’al, according to which this most feudalistic 
and opulent of Persian chiefs agreed to pay to 
the Government a half -million tomans on his tax- 
arrears, of which he paid in cash one hundred 
thousand. The settlement, which was approved 
by the Government, also bound the Sheikh to 
pay his current taxes in the future. In the win- 
ter of 1923, following military successes of the 
army, we established financial agencies in certain 
districts of Kerman, Pars, and Lorestan. 

A largely attended and instructive national ex- 
position of home-made goods was held at Tehe- 
ran in the winter of 1923, under the management 
of Motacham os Saltaneh, whose versatility in 
political and economic matters had endowed him 
in the past with several cabinet positions and 
various industrial concessions, including an im- 
portant one for the importation of silkworm eggs. 

A representative of the League of Nations, Dr. 
Gilmore, made a sanitary survey of Persia. 

A competent Japanese economic mission in- 
vestigated conditions in Persia in the winter of 
1923; and at about the same time a new Kusso- 
Persian Commercial Agreement was signed by 
the Persian Government with the Soviet Legation. 

Late in the winter a joint commission was 
formed with the British Legation, and progress 



was made toward reaching an agreement on the 
various monetary claims of the British Govern- 

A joint technical commission representing the 
Persian Government and the Soviet Legation, in 
spite of many sittings failed to reach an agree- 
ment on the tariff question; and in the fall of 
1923 pourparlers with the Russians concerning 
the future of the Persian fisheries were similarly 




T he crisis of 1924 proved, like that of 1923, 
to be a passing storm. Following our 
letter of protest, I had personal talks with 
the Prime Minister and discussed the matter 
at the Council of Ministers. The Government 
showed a keen appreciation of the seriousness of 
the situation. The Prime Minister assured me 
that he desired as much as ever to retain the serv- 
ices of the American Mission, and that he would 
take steps to make our position easier. His gen- 
eral attitude, which was repeated in his conversa- 
tions with me, was succinctly stated in his letter 
of August 6, in reply to our protest : 

In continuation of my previous letter, I again re- 
peat the good opinion of the Government in regard to 
yourself and our unshakeable determination to empower 
and aid the Mission in forwarding the services which 
it has undertaken. I assure you that the observation 
of the rights and powers which are given to you is and 
shall be thoroughly regarded by me and by the body 
of the Government. 

Soon after, the Prime Minister reorganized his 


Cabinet, and the Government received a vote of 
confidence on August 26, 1924. In the new Cabi- 
net, Eeza Khan introduced as Minister of Fi- 
nance, Zoka ol Molk, whose integrity and patri- 
otism had won the confidence of the people and of 
the Majless, and whose service as Minister of 
Finance in 1923 had proved his friendship for the 
American Mission. The appointmeJit of Zoka ol 
Molk was the best concrete evidence that could 
have been given of the good intentions of the 
Prime Minister. No one, so far as I know, has 
ever doubted that Zoka ol Molk is disinterestedly 
devoted to the public good. He has served as 
Minister of Finance to the present time ; and dur- 
ing these months he has also served as Acting 
Prime Minister during the absence of the head of 
the Government. 

In view of the vital relation of economic affairs 
to our work, the appointment of the Minister of 
Public Works was of special importance. For 
this position, the Prime Minister appointed Sar- 
dar Moazzam, a deputy of Khorassan, an ener- 
getic, brilliant, ambitious, and colorful personal- 
ity, whose persuasiveness and exceptional skill in 
parliamentary leadership were to prove later of 
invaluable aid in the passing of our projects 
through the Majless. The portfolio of Posts and 
Telegraphs was given to Sardar Assad, also a 
deputy and a Bakhtiari khan, who assured me in 



our first talk that he desired to straighten out the 
difliculties which had become acute between the 
two ministries. Sardar Assad was as good as 
his word. He issued orders that the fiscal affairs 
of his ministry should be conducted according to 
law; and he installed our representative, Amid ol 
Molk, as Chief-Accountant and Controller of his 

The acts of the Government with regard- to the 
Imbrie affair were of interest to us, in our offi- 
cial capacity, chiefly as they revealed the purpose 
and strength of the Persian Government. Ex- 
pressing in every possible way its horror over 
the incident, the Government declared martial 
law, establishing a military governor at Teheran, 
made numerous arrests, and proceeded to the 
prosecution of those accused of complicity in the 
murder. One of those proved guilty, a private 
soldier, was promptly executed; and two others, 
Seyed Hossein, son of Soyed Mousa, and Ali, son 
of Abou Taleb, were executed on November 3, 
1924-. The Government of the United States sent 
the cruiser Trenton to take the body of Vice- 
Consul Imbrie from Persia to America ; and Major 
Miles, then American Military Attache at Con- 
stantinople, was ordered to Teheran to accompany 
the body. Departing from Teheran, along the 
road to the frontier, and at Bushire, the port of 
embarkation, the remains of the dead American 



official were accorded full military honors by the 
Persian Government. 

Among the demands made by the Government 
of the United States were that the Persian Gov- 
ernment should pay $60,000 to the widow of Major 
Imbrie and should also pay the expenses of the 
Trenton. The first-mentioned sum was paid im- 
mediately, and the second amount, which was fixed 
by the American Government at $110,000, was 
paid in four instalments before the first of April, 
1925. When the Persian Government had met the 
various demands of the Government of the United 
States, the American Legation at Teheran an- 
nounced that the sum paid for the expenses of 
the Trenton would be held as a trust fund, the in- 
terest on which would be assigned to the educa- 
tion of Persian young men in America. This 
graceful and well-timed act not only served to 
remove any remaining traces of friction arising 
from the Imbrie incident but will also tend, in 
the future, to bind still more closely the traditional 
ties of friendship between America and Persia 
and to contribute in a practical and fundamental 
way to the progress of Persia. 

The Imbrie incident was thus closed. Tragic 
as the crime was, its significance must not be 
exaggerated. It is of course the peculiar duty of 
a government — a duty which in fact constitutes 
an accepted test of its fitness for membership in 



the society of independent nations — ^to protect the 
lives and property of foreigners within its ter- 
ritory. In this respect, Persia had had a good 
record. The traditional .hospitality of the Per- 
sian people toward foreigners is the special 
pride of Persians. Previous to the Imbrie affair, 
no foreigner in Persia, so far as I could know 
or guess, felt any apprehension regarding his 
safety. From the social and political points 
of view, the murder of Major Imbrie can 
be looked upon as a peculiarly regrettable ac- 
cident, the responsibility for which could not, in 
my opinion, without the most extreme casuistry, 
be laid on the Persian Government or the Per- 
sian people. In all truth it must be admitted 
that, had Major Imbrie been ordinarily discreet, 
he would not have been the incitement or the 
object of a mob attack. The mob did not seek 
him ; he went under provocative appearances into 
a place and into conditions which had the elements 
of danger. Moreover, while firmly insisting that 
other nations must protect our citizens, we should 
not be too quick to draw conclusions from a single 
crime, however conspicuous it may be, in another 
country. Western countries also have their 
crimes and their mobs. If Herrin, Illinois, had 
been in Persia, we should probably long ago have 
despaired of that country’s capacity for self- 
government. Herrin, it may of course be replied, 



represents merely a pin-point of disorder in a 
huge country that is on the whole capable and 
law-abiding ; but, as I have already endeavored to 
show, in Persia also crime and disorder are excep- 

Personally, although the object of antipathies 
and attacks, I have never felt in the slightest de- 
gree unsafe in Persia. Nevertheless,, the Gov- 
ernment in the spring of 1925 took cognizance of 
letters from a disponible threatening direct ac- 
tion against me, and assigned an active young 
police officer to act as my guard, l! did not care 
to have him accompany me in my automobile ; but, 
with remarkable alertness and endurance, he kept 
himself always near me when I appeared in public, 
whether I happened to be walking or riding. 

The budget difficulty also was quickly settled. 
The Prime Minister called on me with Zoka ol 
Molk, on September 23, 1924, and agreed oh reduc- 
tions in the various budgets, including that of the 
Ministry of War, which were necessary to balance 
the general budget without new taxes. Revised 
according to our agreement, the estimates of the 
Government were returned to the Majless, and 
received parliamentary sanction on January 1, 

In the meantime, Zoka ol Molk was able to ex- 
plain to the deputies many matters on which hon- 
est misunderstandings had arisen, and, on Nov- 




ember 8, 1924, 1 submitted to bim a detailed mem- 
orandum, which was sent to the Majless, on the 
subject of the advances received from the Imperial 
Persian Bank, showing that these advances had 
been of public record, approved by all the prime 
ministers and ministers of finance who had been 
in office since our arrival, that the proceeds of 
the advances had been spent in accordance with 
approved budgets, and that the outstanding ad- 
vances were virtually equivalent to the deficit of 
the Government for the fiscal year of our arrival. 

The budget as revised and finally passed was 
in itself encouraging. Cuts were made in uhprO'* 
ductive expenditures; credits for the Court and 
for pensions were decreased ; the productive serv- 
ices were left, in general, without reduction or 
with slight increases. The prolonged and at times 
acrimonious discussions of the budget had had its 
compensations. It tended to bring the Majless, 
the Government, and the American Mission into 
a better understanding regarding budgetary pro- 
cedure ; and, most important of all, it served to im- 
press on the deputies and on the people, the neces- 
sity of new sources of revenue if any new public 
services were to be undertaken. 

Beginning in the summer of 1924, important 
political developments occurred in the southwest. 
After the visit of the Prime Minister on August 6 
to Khorammabad, the operations against the Lur 



tribesmen proceeded satisfactorily; but a more 
serious portent arose farther south. Sardar 
Aghdass or Sheikh Khaz’al, the Sheikh of Moham- 
merah, with whom we had in the previous year 
reached a tax settlement, showed signs of unrest, 
which in the course of a few weeks assumed the 
aspects of a threatening rebellion. Success in the 
aims which were attributed to him would have 
confirmed his position as a sovereign or a semi- 
sovereign chieftain, and would have been a serious 
blow at the authority of the Central Government 
and the unity of the country. The story will be 
told largely from published documents. The fol- 
lowing telegram sent on the part of Parliament 
to the sheikhs (tribal chiefs) of Khozistan on 
September 30, 1924, was published in the Teheran 
press : 

The Honorable Sheikhs of Khozistan. In view of 
the fact that you have always been subservient to the 
orders of the legal central government, and inasmuch 
as it is just that faithful persons like you should be 
kept informed of the facts, so that they should not, 
through some possible misunderstanding, be misled to 
take any action that might be against their own desires, 
or that might be contrary to their past records, it is 
necessary that I inform you that the present govern- 
ment, under His Highness Sardar Sepah, enjoys the full 
support of Parliament. Inasmuch as it is the duty of 
the people, when a Government is supported by Parlia- 



ment, to have the same attitude toward that Qovemment 
as that adopted by Parliament, any person who should 
rise, or take any action, against the central government 
would, therefore, be considered as an outlaw by Parlia- 
ment. I am confident that, realizing the significance of 
this statement, you will point out its importance to the 
necessary persons. 

(sd) Motamek ol Molk, President of Parliament. 

Telegrams reached the Government, from 
groups of political and religious bodies in various 
provinces, declaring their loyalty to the Central 
Government and their detestation of the acts of 
Sheikh Khaz’al. Following rumors of unrest also 
among the Bakhtiari tribes, Amir Eghtedar, Min- 
ister of the Interior, Sardar Assad, Minister of 
Posts and Telegraphs, and, in addition to Sardar 
Assad, three other chiefs of the Bakhtiaris, left 
for Isfahan on October 22, 1924. Information was 
published, also, to the effect that the Vali of 
Posht-i-Kouh, another virtually independent chief, 
had risen. The army commandeered transport 
means in the west and expedited the movement of 
troops toward Khozistan. At the height of the 
disturbance it was officially reported that there 
were 22,000 government troops on the Khozistan 
front. On November 5, 1924, the Prime Minister, 
accompanied by a number of military officers and 
civilians and four armored automobiles, left for 
Isfahan. The army journal of November 6, 


published the following General Army Order: 

Despite all my admonitions to Khaz^al and my warn- 
ings to him of the evil consequences that a civil strife, 
under the existing critical situation of the country, will 
produce, he did not abandon his obstinate and unruly 
conduct and refused to submit to and obey the orders 
of the Government. I, therefore, order that the entire 
army prepare all its practical and material resources 
in order to destroy this last impediment against the 
growth and development of the army, and consequently, 
against the prosperity and progress of the country. I 
am leaving for Isfahan to settle the affair. 

From this date on, the Teheran papers chron- 
icled the steady approach of the Prime Minister to 
Mohammerah, the stronghold of the Sheikh, and 
the victories of government troops in Khozistan. 
The press, on November 14, published the text of 
a speech delivered by Sheikh Mohammed Ali 
Teherani in Parliament on November 13. Teher- 
ani began his speech by referring to the great 
improvement that had taken place in the army, 
and said: 

■^^At first troops were sent to the north and then to 
the south. They reached Kerman, Pars, and finally 
Khozistan. Khozistan, which is one of the important 
provinces and an essential member of Persia, finally 
started to have troops. The information that I have, 
indicates that since the period preceding the reign of 
Nasser-ed-Din Shah, no adequate army had been sent 



to Khozistan. In brief, Sheikh Khaz’al, a tribal chief, 
noticing that a change had taken place in the army af- 
fairs of Persia, — ^that the army was no longer in a state 
of chaos, — ^trembled with fear. He saw that the Gov- 
ernment was powerful; that it was stable. He, there- 
fore, endeavored to undermine the power of the Gov- 
ernment. He worried over his enormous wealth. He 
made efforts to bring about a dissension among the 
various tribes. He made suggestions to some of the 
tribes to rise against the Central Government. To 
Sardar Ashayer, Chief of the Kashgai tribe, who gives 
us the honor of his presence here as member of Parlia- 
ment, he suggested — as I understand, (and he can deny 
the information if it is not correct), that he join him 
in rising against the Central Government. He told him 
that he would furnish him with all the money and arms, 
if he only directed the movement. A man like Sardar 
Ashayer, who loves to see that his Government is a 
powerful one, and who knows that the development of 
the country depends on the iiower of its army, naturally 
refused the offer. Since that day Sheikh Khaz'al has 
been acting against the Government. He telegraphed 
to Parliament, saying that he was against Sardar Sepah, 
and that he had risen against Sardar Sepkh, despite the 
fact that, in case he had a complaint, he could ask 
Parliament to remove it without taking up arms against 
the Central Government. We held a private session in 
Parliament. In order to avoid bloodshed, and to avoid 
drawing our swords against each other, we negotiated 
with Sheikh Khaz’al for a period of two months. He 
could not, however, be persuaded, and he started certain 



activities which the Persian people detest. [Applause.] 

“In Parliament we were naturally aware of his ac- 
tions. But we always believed that he would abandon 
them. For this reason we did not make any statement 
in Parliament. But to-day, when it has been well estab- 
lished that all the tribes of Pars, as far as Behbehan, 
as well as the Bakhtiaris, are in support of the Govern- 
ment, that the Sheikh is isolated, and that he fights the 
Government for the sake of his enormous wealth; I speak 
in the name of the people of Persia, — and I am sure 
all the gentlemen here support me in my declaration, — 
and in the name of Persia’s independence and national- 
ity, I express Persia’s detestation for the activities of 
Sheikh Khaz’al and declare that he deserves punish- 
ment. ’ ’ [ Applause. ] 

The Prime Minister arrived at Shiraz on 
November 15, and repeated to Teheran the follow- 
ing telegram received from Sheikh Khaz’al, which 
was read in Parliament by Zoka ol Molk on 
November 18 : 

His Highness the Prime-Minister, May His Dignity 
be Everlasting. Certain persons had led me to believe 
that Your Highness felt unkindly towards me. But I 
have recently realized, thank Allah, that this is not the 
fact, and this has made me very hopeful. Your High- 
ness is well aware of the fact that this misunderstanding 
was strengthened by the intrigues of certain selfish per- 
sons and malefactors — ^not including the Bakhtiaris — 



who have of course never felt hostile towards Your 
Highness. These persons endeavored to use me for 
their selfish interests and to make me an instrument by 
means of which they intended to attain their long de- 
sired objects. I finally realized that the policy that 
I had adopted was not a sound one, and I therefore 
beg to express my regrets and to ask Your Highness to 
pardon me for the unworthy steps that I have taken 
during the last several months against tlie Imperial 
Government. In the future as in the past I shall en- 
deavor to realize my ambition, which has always been 
to render the greatest amount of service to my Govern- 
ment and to obey and fulfill Your Highness’ instruc- 
tions to the best of my ability and sincerity. And I 
have every hope that Your Highness will accept my re- 
grets and will again place me under your confidence. 
I understand that Your Highness intends shortly to 
visit the South. If this is true, I shall very much like 
to have the honor of coming to see Your Highness, in 
order that I verbally express to Your Highness — as the 
Head of my Government — my regrets for the past and 
the assurance that I shall faithfully serve you in the 
future. Awaiting the expression of kindness on the 
part of Your Highness and your permission that I bo 
honored by coming to see you. 

(sd) Khaz’al. 

To this telegram, the Prime Minister reported 
that he had sent the following reply: 

Hr. Sardar Aghdass. I received your telegram in 



Shiraz. I shall accept your apologies and regrets pro- 
vided that you surrender unconditionally. 

(sd) Reza, Prime-Minister and Commander in Chief 
of the Army. 

On November 23, the Prime Minister tele- 
graphed that he intended to go to Mohammerah 
with the army; and on November 26 he left Bu- 
shire on the Persian gunboat Pahlevi. Two days 
later he telegraphed that he had arrived at the 
front, and in reply to another telegram from the 
Sheikh couched in terms of surrender, he had 
replied : 

Inasmuch as he is a Persian subject, and I do not 
desire to see that any Persian is destroyed, and inas- 
much as I have no other intention except that of bring- 
ing about the state of centralization in the country — 
a principle which I have always pointed out to the 
public — ^he must come to the advance part of the front, 
where he must verbally plead for amnesty and i; renew 
his desire to surrender. 

Zoka ol Molk, as Acting Prime Minister, issued 
the following statement on December 2: 

A rumor, the reflection of which has appeared in some 
telegraphic news sheets and local papers, has recently 
prevailed with regard to the receipt by the Persian 
Government from the Government of Great Britain of 
certain notes concerning Khozistan. For the informa- 
tion of the public I hereby deny the existence of such 
potes, which would be contrary to the sovereign rights 



of Persia. The Persian Government is making every 
effort to protect the interests of Persia. 

Acting on my suggestion that in such an 
emergency, provision should bo made for prompt 
payments to the army, the Majless on December 2 
passed the budget of the Ministry of War in ad- 
vance of the general budget. The press of Decem- 
ber 10 published the following telegram from the 
Prime Minister : 

At 5 p. M. December 5 I arrived at Nasseri. The son 
of Khaz’al, accompanied by a number of the Sheikhs 
and notables had come out several farsakhs to meet me. 
Nasseri was illuminated and decorated. The inhabi- 
tants of the town were making preparations for joy and 
festivity. Ehaz’al, who had been compelled by serious 
illness to go to Mohammerah, returned to Nasseri. Ac- 
companied by Morteza Gholi Khan Bakhtiari, he came 
to me this morning (December 6) asked for amnesty 
and obtained it. All the reinforcements dispatched 
from the Western Division of the Army have arrived 
in Dizful. The inhabitants illuminated the city during 
three successive evenings and celebrated the arrival of 
the troops on a large scale. 

On December 15, the Prime Minister tele- 
graphed that he had completed the settlement of 
the Khozistan affair ; that he had appointed Gen- 
eral Fazlollah Khan as Governor-General of 
Khozistan ; that the Khorammabad-Khozistan 
road was re-opened to caravan traffic ; and that he 



would leave for Teheran on December 17, by way 
of Bagdad, making a pilgrimage on the way to 
the shrines of Kerbela and Nedjef. 

Following the subjugation of the Sheikh, we 
sent a commission to Khozistan to organize a pro- 
vincial financial administration; and it is our in- 
tention in the future to collect directly the rev- 
enues of that region. The Vali of Posht-i-Kouh, 
who fled to Iraq after the surrender of Khaz’al, 
also obtained amnesty and in April acknowledged 
complete submission to the Central Government; 
and at the request of the Prime Minister we im- 
mediately took steps to establish financial and 
customs agencies in his territory. 

It can be conjectured that Khaz’al showed signs 
of wavering, for in May, 1925, he came to Teheran 
on the invitation of the Prime Minister ; and when 
I left Persia, on leave of absence, the once semi- 
sovereign chieftain was living quietly, making and 
receiving no calls, in one of the residences of the 

When the Prime Minister arrived in Teheran on 
January 1, 1925, bronzed by his winter travels, he 
was accorded a reception which far outshone that 
which had greeted the Shah two years before. 
Arches were erected over the streets ; public build- 
ings and shops were decorated and illuminated; 
a public holiday was declared; gifts were pre- 
sented to him and flowers scattered in his path. 



Bumor had it also that, even before his arrival, 
certain of the enemies of the American Mission 
had attempted to win him definitely to their side. 
So it is necessary now to turn in our story from 
the unification of Persia to the position of the 

As I have mentioned before, there was in the 
Majless a group of deputies who are particularly 
devoted to the ideas that underlie the presence 
of the American Mission in Persia. Among these 
deputies are Mostowfi ol Memalek and Muchir ed 
Dowleh, ex-prime ministers, Khaikosrow Shah- 
rokh, the Zoroastrian member, Hossein Khan 
Alai, and Taghi Zadeh. Alai had been at one 
time a forward-looking minister of public works, 
and for a number of years had served with dis- 
tinction in the Persian diplomatic service, being 
at the time of my appointment minister at Wash- 
ington. Taghi Zadeh was, in 1906, one of the 
young revolutionary deputies whose eloquence 
swayed the Majless and who was a strong in- 
fluence in the establishment of the Constitution. 
For several years he had been in Europe. The 
return of these two men to Persia in the fall of 
1924, and their addition to the independent group, 
injected new blood, enthusiasm, hope, and energy 
into the progressive forces. I do not wish to im- 
ply that the five men that I have mentioned were 
the most influential in the Majless or were the 



only ones that were ready to defend the American 
Mission. Many deputies were destined in a few 
weeks to rise to the defense of the mission or of 
the measures proposed by it. These men, how- 
ever, formed the nucleus around which grew in a 
short time a friendly majority; and since con- 
ferences are most fruitful when limited in num- 
ber, it was to these few men — distinguished for 
probity, sagacity, and patriotism — that I turned 
and was advised by others to turn for counsel and 
assistance. With these deputies I have had fre- 
quent meetings; and their efforts, with the help 
of others and with the natural trend of circum- 
stances, brought about an amazing change of at- 
titude on the part of the Majless. 

I speak of the natural trend of circumstances 
because I believe that during its first year, the 
fifth Majless, like the Prime Minister and myself, 
had to pass through a period of orientation and 
adjustment. Personal and local questions, which 
at the start were uppermost in the minds of the 
deputies, had to run their natural course ; an ap- 
preciation had to bo gained of national questions ; 
the deputies had to become acquainted with one 
another, with the Government, and with the Amer- 
ican Mission; and, finally, time worked its own 
cure, for a deputy, even though desirous of con- 
structive legislation, could hardly be expected to 
hurry much with twenty-four, eighteen, or even 



twelve long months between him and another elec- 

Feeling that much of the hostility to the Amer- 
ican Mission had been duo to misunderstanding, I 
adopted the policy of sending to a number of the 
deputies copies of my official communications on 
matters of general interest. These mimeographed 
copies of memoranda, letters, and projects, cir- 
culated among the deputies, made the truth known 
and took the wind out of the sails of those whose 
trade in intrigue had depended largely on mis- 
representation or misunderstanding. On Novem- 
ber 25, 1924, during the discussion of the budget, 
Emad os Saltaneh, Deputy of Isfahan, delivered 
a speech in defense of the mission ; and a speech 
by an editor-deputy attacking the mission met 
with an unfavorable reception. Later, Mirza 
Abdollah Yassai, deputy of Semnan, rose splen- 
didly to our defense. The changed attitude of the 
Majless was concretely shown when Khaikrosrow 
Shahrokh, proposing the salaries and expenses of 
the Parliament for 1925-26, voluntarily reduced 
the estimates by an amount of forty thousand 

In order to assist in the formulation of con- 
structive economic jjrojects, the Majless estab- 
lished at about this time a new commission, called 
the Economics Commission, consisting of seven 
able deputies under the chairmanship of Taghi 



Zadeh. The first work of the commission, in 
which the Minister of Finance and 1 participated, 
was to draft a bill, which was duly approved by 
the Government, embodying a permanent pro- 
gram of road-construction and maintenance and 
proposing new taxes to carry out the program. 

I called on the Prime Minister the day after his 
return to Teheran, and found him most ‘cordial. 
Returning my call a few days later, he stated that 
his visit to Khozistan had. greatly impressed him 
with the resources of Persia, and that he desired 
more than ever to cooperate with the American 
Mission in getting constructive projects through 
the Majless and in attracting foreign capital to 
the country for the development of its resources. 
During the absence of Sardar Assad in Isfahan 
and Khozistan, the Ministry of Posts and Tele- 
graphs had suffered another relapse ; and, having 
reached the conclusion that our difficulties' with 
that ministry could not be removed so long as 
Mokhber ed Dowleh remained, the Prime Minister 
authorized Sardar Assad to remove him; and on 
February 1, 1925, this under-secretary, who had 
been a persistent stumbling-block in the path of 
reform, submitted his resignation. Since that 
date our relations with the Ministry of Posts and 
Telegraphs have been satisfactory. 

In order that there might be less danger of 
misunderstanding in the future between the Gov- 



ernment and the American Mission, the Prime 
Minister asked me to attend regularly the Satur- 
day sessions of the Council of Ministers. This 
I have done. 

After the return of the Prime Minister, the 
question of the monarchy, and particularly the 
question of the position of Beza Khan Pahlevi in 
the Government, became again acute. The Shah 
had been in France for more than a year. The 
Prime Minister, according to my information, de- 
sired assurance that, in continuing the work in 
which he was engaged, his position should not he 
jeopardized by a state of affairs which bred un- 
settling intrigues. Patriotic Persians, opposed to 
any action which might disturb or appear to dis- 
turb the program of economic development, de- 
sired a return to political normality. Represent- 
atives of the various Parliamentary groups met 
and prepared a bill which was passed on February 
14, 1925, naming Beza Khan Pahlevi the gen- 
eralissimo of all the defensive and security forces 
of the empire and providing that he should not 
be removed from his post except by vote of the 
Majless. On February 28, 1925, according to 
press reports, the Crown Prince called on the 
Prime Minister ; when, a little later, the ex-Shah, 
Mohamed Ali, died in exile, the Prime Minister 
was reported to have spent the day consoling the 
Crown Prince; and it was also reported in the 



press, about the same time, that telegrams bad 
been sent to the Shah asking him to return to 

In order to facilitate further the cooperation 
between the Government and the Majless, the 
Prime Minister proposed on February 17, 1925, 
that a commission of twelve leading deputies be 
appointed to confer with the Government on im- 
portant questions of policy. This commission 
was appointed on March 4; its sessions were at- 
tended by the President of the Majless, the Prime 
Minister, the ministers, and myself, and it proved 
most useful in formulating projects and expedit- 
ing their passage through the Majless. 

At about this time, I called the attention of the 
Prime Minister to the clause in my contract, and 
in the contracts of my principal assistants, which 
gave either of the two parties a right to terminate 
the contract at the end of three years. Sinbe the 
three-year period was to end on September 29, 
1925, and since many of the members of the Amer- 
ican Mission were entitled to three months ’ leave 
of absence, I requested the Prime Minister to in- 
dicate for our guidance whether or not the Gov- 
ernment intended to exercise its option. I told 
him further that since some of the members of 
the mission would probably wish to leave Persia, 
it appeared necessary to introduce a bill into the 
Majless for the employment of additional Amer- 



leans. He replied without hesitation that the 
Government had no intention of terminating our 
services, and that he would support a bill for the 
employment of more Americans. Accordingly, a 
project for the engagement of twelve Americans 
for the financial administration was introduced 
into the Majless and was passed on May 19, 1925, 
without substantial opposition. "When the new 
positions are filled, the mission will have sixteen 
members, including an agricultural expert and 
eight men for the provinces. 

In accordance with the terms agreed upon for 
the repayment of the advances received from the 
Imperial Persian Bank, the oil royalties payable 
on December 31, 1924, had not been available for 
governmental expenses. On the other hand, it 
had been impossible during the year to obtain new 
revenue to fill the gap caused by the loss of the 
royalties. As a result we had steadily fallen be- 
hind in current disbursements, and as the end of 
the year approached, the payment of the budg- 
etary expenses was on the average about a month 
in arrears. As Now-Euz — the time of holidays, 
feasting, and presents — drew near, discontent 
among the employees increased. Teachers went 
on strike, and the Ministry of Justice made illegal 
payments to its employees and judges out of its 
trust funds. In order to relieve the situation, the 
ministers and many of the deputies desired to 



obtain another advance of a million and a half 
tomans, which the bank had indicated its willing- 
ness to give. 

I pointed out, at this juncture, that a further 
advance would be inadvisable unless the Majless 
would approve an increase of taxes. Although 
less than a week remained before Now-Buz and 
the end of the year, the Prime Minister, went per- 
sonally to the Majless on March 16, introduced a 
bill that we had prepared for the amendment of 
the tobacco-tax law, and asked its urgent consid- 
eration. The Prime Minister and all the Cabinet 
worked among the deputies and attended the ses- 
sions of the Majless. The debate began the same 
evening and continued on the following day, and 
the bill was passed by an overwhelming majority 
at eleven o’clock in the evening of the next day. 
This encouraging success with a tax project is to 
be credited largely to the personal exertions of 
the Prime Minister and to the energy and parlia- 
mentary skill of Sardar Moazzam. The new 
law is estimated to produce a half-million tomans 
additional revenue yearly. Its enactment is a 
striking refutation of the charge that Persians 
cannot make decisions or act quickly. On April 
21, the Minister of Finance introduced two new 
tax bills : one for a government monopoly of sugar 
and tea, the proceeds to be used for the construc- 



tion of railroads, and the other for a tax on 
matches, the revenue to be assigned to sanitation. 
The first project, estimated to produce five mil- 
lion tomans yearly, was passed on May 30, 1925, 
and the second with an estimated annual return 
of two hundred thousand tomans is expected to 
be approved soon. 

In May, 1925, occurred an outbreak of the 
Turkomans, who inhabit Estrabad in the north- 
eastern part of Persia. For some time their 
sporadic forays had caused losses to the peasants 
of adjacent provinces ; but, according to the state- 
ment of the Assistant Minister of the Interior in 
Parliament : 

On about the middle of Ordibehesht (May 5) we 
were in receipt of reports to the effect that the Turko- 
mans had come in boats and bad suddenly landed in 
Mazanderan and Tunekaboun. Also we learned that 
they had committed certain acts of mischief in the 
neighborhood of Bojnourd. When these events hap- 
pened about a week ago, the Government lost no time 
and took immediate steps to send forces and aeroplanes. 
The Government's policy is to try to settle an incident 
peacefully. But when this policy fails to bring forth 
the desired results and encourages the outlaws, we con- 
sider it as our duty to take immediate and drastic steps 
to face the situation. The Ministry of War states that 
forces have already been despatched and action has 
been taken to suppress the insurgents. I sincerely hope 



that within two or three days I shall be able to give 
some good hews to Parliament. 

From reports that I have received since leav- 
ing Persia, I understand that this uprising has 
been suppressed and its leaders appropriately 

While engaged in suppressing the Turkomans, 
the Prime Minister began in May, 1925, the dis- 
arming of the Bakhtiari and Kashgai tribes. 
Thus the work of unification proceeded apace; 
and, as if to put a seal on his brilliant accomplish- 
ments, Keza Khan Pahlevi, in the summer of 1925, 
personally visited Azerbaidjan, the scene of his 
first triumph, and Khorassan, of his latest. The 
stability of Persia is further shown by the fact 
that during the Kurdish uprising in Turkey, in 
March, 1925, there was, according to reports, per- 
fect calm in the Kurdish region of Persia. 

Starting in the spring of 1925, the fourth fiscal 
year that we have experienced in Persia, we were 
able to chronicle a continuance of financial prog- 
ress. Incomplete accounts for the fiscal year 
ending March 21, 1925, indicated that the deficit 
had been brought down to probably one half of 
one per cent, of the total budget. In spite of 
serious crop failures which not only aggravated 
our alimentation difiSculties but also reduced 



revenues, the receipts from internal taxes for the 
year were twelve per cent, more than in the 
previous year. Our control over expenditures 
was tightening. Centralized purchasing had ef- 
fected a clear saving of over fifty thousand 
tomans. The assets and liabilities of the Bank-i- 
Iran were transferred to the Ministry of I’inance ; 
and there was strong sentiment among the Per- 
sians for the establishment of a Persian national 
bank. Projects for the purchase of pensions, for 
the payment of Persian claims, and for agricul- 
tural relief, were pending in tlio Parliament. The 
adverse balance of trade, without considering “in- 
visible” exports and imports, was steadily de- 
creasing. Importations of silver were keeping 
the mint working day and night. The tariff and 
fishery problems, under discussion with the Soviet 
Legation, were still unsolved, but a reasonable 
offer made by the British Government seemed to 
present a practicable basis for the settlement of 
its monetary claims. An able special envoy from 
the Netherlands visited Persia early in 1925 to 
study the economic situation. The cities of 
Persia, such as Teheran, Tabriz, and Eesht, were 
widening their streets, and the roads of Persia 
were noticeably improved. To demonstrate that 
Persia is not interested solely in financial and 
economic progress, one new tax project was ear- 



marked for sanitation and another for education; 
the calendar was reformed and titles abolished; 
a large part of a code of commerce was put into 
effect; a project for electoral reform was ad- 
vanced to its third reading; a law abolishing ob- 
solescent imperial farmans and a bill defining the 
terms of Persian citizenship were introduced. 




M y contract with the Persian Govern- 
ment provides that the Administrator- 
General of the Finances shall be con- 
sulted by the Government “in regard to all com- 
mercial and industrial concessions and shall have 
an opportunity to express his opinion regarding 
them orally or in writing,” and “shall as far as 
possible exert his utmost endeavors to extend, 
facilitate, and encourage the investment of foreign 
capital in Persia, with a view of overcoming in 
every way the economic crisis in Persia and to 
contribute to the economic development of Persia 
on a sound basis.” Under these provisions of 
my contract, I have been in almost daily consulta- 
tion with the Government on economic subjects. 

The Persians are undertaking a task which has 
been, and still is, baffling and discouraging even 
to the politically gifted and experienced Anglo- 
Saxons. They are molding a nation, which they 
hope may be unified and independent; they are 



making a government, which they wish to be a 
representative, respectable, and efficient instru- 
ment of economic and social progress. They are 
apparently getting ahead in their task in spite of 
formidable difficulties. The geographical situa- 
tion of the country is, of course, one of the handi- 
caps. As a young and none too reverent Persian 
once remarked to me, “God had become’ careless 
when he got around to make Persia.” Largely 
because of geography, it is necessary at this late 
date for Persia to modernize its primitive culture 
and to develop neglected resources while working 
out the problem of self-government. 

Varieties of soil and temperature, as well as 
varying degrees of rainfall, — ranging from desert 
conditions in the center, to the over-abundant 
rainfall of the north coast, — render Persia almost 
self-sufficient as regards its agricultural and live- 
stock production. It is perhaps difficult or impos- 
sible to find Persian-grown pineapples, bananas, 
or maize; and the different variations in form, 
color, and flavor resulting from modern, scientific 
breeding are not so evident in Persian markets 
and on Persian tables as in Western countries; 
but, nevertheless, an enumeration of the things 
which are or can be produced in Persia would 
constitute almost a complete list of the world’s 
agricultural products. The chief exportable agri- 
cultural and live-stock products are dates, figs, 



wheat, barley, cotton, tobacco, opium, silk, raisins, 
rice, sheep’s intestines, and wool. In addition, 
Persia grows, for its own consumption, tea of 
good quality, olives, fruits, vegetables, and nuts, 
and all kinds of meats (except, of course, pork 
and pork products). Game is abundant. Herds 
of gazelles may be seen from the roads ; partridge- 
shooting and trout-fishing are common sports. 

Nevertheless, with the exception of opium and 
fresh and dried fruits, Persia was at the time of 
our arrival exporting only insignificant quantities 
of agricultural and animal products. The lack 
of agricultural exports other than those men- 
tioned, was duo chiefly to the difficult transport 
conditions and the stoppage of trade with Russia. 

The village system of agriculture, somewhat 
similar to the manorial system of medieval 
Europe, exists throughout most of the country. 
The villages, with the surrounding cultivated land, 
range in size from a few acres to several square 
miles ; in population they vary from a few families 
to several thousand. Some of the villages attain 
the proportions of towns or small cities, with 
caravansaries, mosques, bazaars, numerous shops 
of tradesmen and artisans, and extensive gardens. 
Many villages are owned by landlords who reside 
in Teheran or other cities. They make occasional 
visits to their properties, but usually leave the 
details of administration to their agents. The 



arable land around a village is divided into strips 
or blocks, and these are apportioned among the 
peasants for cultivation. 

The peasants live in the village, and with their 
women, children, and farm animals go out to the 
surrounding fields during the day. 

Only a fraction of the rural area of Persia is 
cultivated. Between villages lie stretches of 
pasture-lands or of land which though fertile is 
bare because of the absence of water. Almost 
anywhere, when water and seed are brought, the 
soil blossoms like the delta region of Egypt. The 
average rainfall in the interior, however, is only 
about six inches, and agricultural production, 
therefore, depends on irrigation. Irrigation in 
the interior is effected in general by means of 
kanats or underground canals, through which 
water is carried to the towns and villages and 
made available for the watering of the fields. 
Every hundred yards or more there is an open- 
ing into the kanat, from the surface, and fhrough 
these openings the peasants descend to clean 
away sediment or to remove other obstacles. 
Near cities or large villages, the landscape is 
fairly pockmarked with the crater-like openings 
to the kanats. 

During the war — due to devastation by the 
armies, the industrial depression, and in many 
regions the scattering of the inhabitants — ^villages 



and kanats went to ruin. There are, I dare say, 
few villages in Persia which do not show more or 
less the ravages of the last few years. Some are 
wholly ruined and deserted ; the mud houses fallen 
down ; the kanats caved in and dry ; the fields bare 
and baked. 

About six months after my arrival in Persia, 
the financial agent of Garrous, in northwestern 
Persia, reported that of two hundred and forty- 
one villages in his district, one hundred and six 
were ruined and without inhabitants, while the re- 
mainder were partly ruined and partly tenantless. 

By tax-exemptions, loans of seed, and, as in the 
Urumiah region, loans of money for the repair of 
buildings and the purchase of seed, oxen, and 
implements, some assistance has already been 
given in the reconstruction of agriculture. In the 
spring of 1925, the Government introduced into 
the Majless a bill, which was favorably reported 
by the Budget Commission, authorizing the Min- 
istry of Finance to grant loans to landowners, out 
of the retirement-pension fund, on the security of 
real estate, for the reconstruction of villages ; and 
it is also the purpose of the Government to use a 
part of the proceeds of a foreign loan for the 
reconstruction of irrigation. At present, im- 
provement may be scarcely perceptible ; but with 
the continuance of order in the country, with the 
re-opening of foreign trade, with the improve- 



ment of internal transportation, and with well- 
planned financial assistance by the Government, 
the recovery of agriculture should in a few years 
become marked. 

Three years ago modern agricultural machinery 
was virtually unknown in Persia. Plowing was 
by wooden plows drawn by oxen, or in some cases 
the ground was spaded by hand; the grain was 
cut by sickles, drawn by donkeys, threshed by 
tramping with oxen driven round and round in 
circles over the heaped-up grain, and winnowed 
by the wind. Since our arrival, Russian, British, 
and American agricultural machinery has been 
imported, and is finding a steady sale to the more 
progressive landowners. 

Parm machinery has been demonstrated at the 
Agricultural School at Teheran, which is directed 
by the Minister of Finance ; and these demonstra- 
tions are always attended in large numbers by in- 
terested Persian officials and proprietors. Also, 
plans are under way for the establishment of 
model farms and experiment stations. 

Fertilizer is little used, and probably in most 
districts unnecessary. The fields are cultivated 
one year and lie fallow the next. 

The distribution of the crop, among the various 
factors in its production, is a complicated matter, 
which is, however, of much practical importance 
from the viewpoint of land-taxation, as well as 



from the broader viewpoint of the wage system 
and the distribution of wealth. Owing to the 
varying climate, the lack of homogeneity, the 
absence of uniform customs, the difference in the 
number of peasants in different places, and the 
fact that some landlords have more power than 
others, there is no uniform rule with regard to 
the apportionment of the crop. In general, it may 
be said that in a typical village irrigated by means 
of kanats, there are five factors in production, — 
land, labor, oxen, water, and seed, — and to the 
one who provides each factor a fifth of the product 
is given. "Where the land is watered sufficiently 
by rain or by natural streams, the distribution is 
different. In some places the peasant may re- 
ceive two thirds or three fifths of the crop; in 
other places the proprietor likewise may receive 
two, three, or even four of the shares. If there 
is, as is likely, a gavhand or cow-keeper, he will 
receive one fifth of the product; and if he also 
furnishes the seed, he may get two fifths, or one 
third. There are also laborers who are employed 
by the peasants for wages and servants who re- 
ceive little more than a bare livelihood. 

Local government in a Persian village is simple. 
The principal authority in agricultural affairs is 
the kakhoda or head-man. In many districts, the 
distribution of water is in the special charge of a 
water-man. When a dispute arises over water or 



land, it is often submitted to the impartial de- 
cision of the graybeards. When any case requir- 
ing a legal judgment arises, appeal is made to the 
local mullahs, to the sub-governor, or even to the 
governor of the province. 

In most of the villages, unfortunately, there 
are at present no schools, courts, or police. 
Nevertheless, there is little crime or disorder. 

Almost every Persian village has its own char- 
acter and traditions, being locally famous for its 
melons, fruit, rugs, embroidery, or other handi- 
craft, or for the industry, intelligence, or bravery 
of its people. 

The following extracts, in free translation from 
the report of one of our cadastral surveyors, will 
throw light on the conditions in the Veramin 
district about twenty miles from Teheran: • . 

Veramin comprises three hundred and sixty villages, 
of which fifty-two, belong to the Government. Its 
length from north to south is twelve farsakhs [about 
forty-eight miles] ; its width from east to west is ten 
farsakhs [about forty miles]. Only one tenth of this 
district is cultivated. The soil consists of sand and 
clay, and, if dug to the depth of from five to twenty- 
five yards, water will be found. Veramin is irrigated 
by two hundred and thirty kanats running from the 
Djajeroud River. There is no rain after the middle of 
spring. There are no thunder-storms and the wind is 
insufficient. In summer the east wind is warm, west 



wind cool. The quantity of seed sown is nine thousand 
khavars per annum, about ninety thousand bushels. 
The principal crops are wheat, barley, millet, corn, rye, 
and rice. When there is no damage, wheat produces 
eighteen-fold and other grains from twenty-five to 
seventy-fold. Poppy, cotton, sunfiower, and caster are 
also raised. The fruits are figs, pomegranates, and 
apricots; the fruitless trees are poplar, sycamore, and 
ash. The farm animals are principally camels, sheep, 
goats, horses, mules, and donkeys; and domestic fowls 
are represented by turkeys and hens. There are no 
schools. Most of the peasants are poor and many of 
them have left their homes. 

The following abstract of a report prepared by 
another Persian finance official describes condi- 
tions in the province of Isfahan : 

Most of the land is irrigated by the river Zayendeh- 
Bood, flowing from Zardkooh Mountains, one hundred 
miles to the west of Isfahan, but in some districts irriga- 
tion is from wells. In spring the excess flow of the 
river loses itself in the sand tract called Gav-Khooni, 
a hundred miles to the east of Isfahan. The climate is 
moderate. In the summer the maximum temperature 
is from thirty-two to thirty-six Centigrade in the sun. 
The minimum is from twenty-one to twenty-five. The 
freezing season lasts for two months during the winter, 
with a moderate fall of snow. There is no rain during 
the summer and there are no clouds. Soft and cooling 
breezes blow from the south and west. Thunder-storms 
are rare. The soil is clay and chalk mixed in some 



sections with fine sand. Alfalfa, clover, and maize are 
cultivated successfully; the climate is very favorable 
for growing mulberry trees; grapes are most successful. 
The inhabitants are penurious, credulous, and satisfied. 
There are well-bred horses, swift donkeys, camels, mules, 
and load donkeys. Large fat-tailed and Turkish sheep 
are realred' plentifully. Good cows are rarely seen. 
Hens are common; tui*eys, geese, and ducks are rare. 
Apples, pears, apricots, and peaches are of remarkable 
size and fine flavor, and the quinces and melons are the 
best in Persia. Opium is extensively cultivated. To- 
bacco and cotton are also important crops. Rice is also 
produced in some districts. 

The most significant feature of agriculture in 
Persia, is its comparatively limited area. In the 
areas actually under cultivation at present, pro- 
duction can probably, by obvious and practicable 
measures, be increased sufficiently to support a 
population two or three times as great - as the 
present population of the country. The most 
needed measures for the increase of agricultural 
production are the reconstruction of ruined vil- 
lages ; the combating of insect pests and diseases 
of plants and animals; the improvement of seed 
and methods of cultivation ; the use of agricultural 
machinery ; the substitution in certain districts of 
crops better adapted to the climate than those 
grown at present, and the construction of large- 
scale irrigation works. The application of these 
measures is imperatively needed at present to im- 


Garden of Dr. Millspaugh's summer home at Tajrish 


prove the living conditions of the people and to 
insure against famine. 

The general stimulation, to any great extent, 
of agricultural production in Persia, however, 
would not be economically desirable or possible 
until improved transportation facilities had been 
provided and markets had been found for the ex- 
cess production. The resumption of trade with 
Russia provides such a market for certain of the 
surplus products of the Caspian littoral. The ex- 
portation of the surplus production of other parts 
of Persia must wait, in general, until markets 
have been found and means provided in the in- 
terior of Persia for the transportation of its 
products to the frontiers. 

Of the insect pests which prey on the crops of 
Persia, locusts and grasshoppers are a perennial 
cause of loss; but one of the most serious pests 
which we have had to combat, in our efforts to 
preserve the crops of Teheran Province and to 
protect the bread-supply of the capital, is the 
senn. This insect breeds on a mountainside near 
Teheran, emerges from the bushes early in the 
spring, and starts its flight to the fields. It is 
said to suck the sap in the grain-stems as a silk> 
worm eats a mulberry leaf. It is understood that 
about seventeen years ago, after a very cold 
winter, the senn almost disappeared and the price 
of wheat decreased to about a quarter of its pres- 



ent price. We have attempted, with the as- 
sistance of the army, to bum the breeding-places 
of the insects, and have also paid the peasants for 
gathering them by hand. None of these measures, 
however, have thus far been effective, and it is 
hoped that the new American agricultural expert 
may succeed in solving this important problem. 

Anthrax and cattle-plague, during the past year 
or two, have killed increasing numbers of cattle, 
and have seriously handicapped production 
through losses of work-oxen. Serum for inocula- 
tion, however, is now successfully made in Persia, 
and it is hoped this will check the spread of these 

No survey of Persian agriculture would be com- 
plete without a reference to opium-cultivation. 
There are none among the thinking classes in 
Persia who do not realize the serious moral, 
physiological, and economic menace of the opium 
habit. The Persian Government had before our 
arrival taken steps to regulate the trade in opium. 
It has been ready, I am convinced, to cooperate 
whole-heartedly with other nations in controlling 
the export trade in Persian opium, in restricting 
its cultivation in Persia, and in limiting its con- 
sumption to medicinal requirements, even though 
these measures should bring about a serious 
sacrifice of revenue. Irrespective of the revenue 
which is derived by the Government from it, 



opium-cultivation in Persia constitutes one of the 
important agricultural industries, and the only 
one which makes any substantial contribution to 
the export trade. Opium is a compact commodity 
representing large value in small bulk; and not- 
withstanding that it must be carried long dis- 
tances by wagons and pack-animals, it can be 
transported and exported at a profit. The opium 
poppy is raised in eighteen of the twenty-six 
provinces; its cultivation is scattered over an 
area of four hundred thousand square miles. The 
total aimual production is approximately a thou- 
sand tons. In 1923-24, exports of opium through 
the customs-houses were valued at 6,021,971 to- 
mans, or 15.6 per cent, of the total export trade of 
Persia, exclusive of petroleum.^ 

Allowing for undervaluation and for contra- 
band shipments, the opium exports may be safely 
estimated at from one fifth to one fourth of the 
total exports of Persia, exclusive of petroleum. 
In many districts, opium is virtually the only crop 
which yields cash returns, and a large number of 
people are almost or wholly dependent on the 
opium business for their livelihood. In Isfahan, 
the center of opium-production, it is estimated 

1 Petroleum, the principal Persian export, does not figure 
in the balance of trade, since it virtually returns to Persia 
only the royalties paid to the Government, the payment of 
wages of employees, and a small amount paid for supplies in 



that at least one quarter of the population of the 
city is dependent more or less on the opium trade.^ 

Nevertheless, there is no disinclination in Persia 
to face the fact that measures for the agricultural 
and commercial development of Persia must be 
considered in the light of the ultimate restriction 
of opium-cultivation and export, and that any such 
measures — if they are far-sighted, sound, and 
comprehensive — ^must include plans for the sub- 
stitution of other exportable crops for opium. 
Among the crops which appear possible thus to 
substitute are wheat, silk, tobacco, cotton, tea, 
hemp and flax, and dried fruits. It may be pos- 
sible, also, to find a measure of compensation in 
the future production of beef cattle, wool, and 
lambskins for export, and in the development of 
mineral resources. The practical realization of 
such substitutions, however, will demand careful 
experimentation and systematic preparation, the 
finding of markets abroad, and particularly the 
improvement of transportation in Persia. 

At the recent Opium Conference at Geneva, the 
Persian Government laid its case frankly and 
fully before the other nations. The remarkable 
significance of its action seems in some quarters 
to have been overlooked. An opium-producing 
country, with a large industry and an important 
part of its export trade and revenue at stake, 

1 See page above. 



Persia, nevertheless, declared in good faith its 
entire willingness to adopt measures in accord 
with the most enlightened conceptions of the 
world’s moral and hygienic needs, provided only 
that the other nations — ^which are wealthier than 
Persia, have infinitely less, economically, at stake, 
and from the hygienic standpoint will benefit im- 
measurably more than Persia by the restriction of 
opium production — should assist in carrying out 
any practical economic measure which may be 
demonstrably necessary to bring about the cur- 
tailment of opium-cultivation in the country. 

It is not necessary or appropriate here to dis- 
cuss the reasons for the failure of the Geneva 
Conference. It seems clear, however, that the 
Persian position at the conference was neither 
obstructive nor impracticable. There was no in- 
tention on the part of Persia to fix conditions 
merely for purposes of procrastination, or to use 
the opium question as a pretext for procuring a 
foreign loan. It is true that Persia, in laying her 
cards on the conference table, stated that a 
foreign loan of perhaps ten million tomans (not 
ten million “tom-cats” as some of the Geneva 
delegates remarked), with certain reasonable as- 
sistance in connection with the tariff and foreign 
claims, seemed to be the quickest and most 
practical method of financing the industrial change 
required by the restriction of opium-production. 



Our estimate of the exact sum required for the 
processes of substitution, was of course tenta- 
tive; and I hope it will be possible for some au- 
thoritative body to send a competent commission 
to Persia to study the situation on the ground and 
report the facts to the world. 

Tobacco grown in Persia is of three kinds: 
water-pipe, grown in the southern provinces, pipe 
tobacco, raised in the northwest, and cigarette 
tobacco, produced in Guilan and Mazanderan, on 
the Caspian coast. Persian tobacco is of excel- 
lent quality and should find a readier sale abroad. 

The soil and climate of Persia are favorable for 
cotton-growing. The chief drawbacks thus far 
have been the crude methods of cultivation and 
the poor selection of seed. Before the war the 
production of cotton in Persia had reached 140,- 
000 bales of five hundred pounds each, constitut- 
ing almost a fifth of the exports of Persia. In 
1920-21, the exports were less than 3000 bales. 
Due to the loss of markets, because of the World 
War and the Revolution in Russia, cotton-culti- 
vation was largely abandoned and other crops 
were planted instead. 

The war and its incidental effects cut down silk- 
production in Persia ninety per cent. The cen- 
ters of silkworm breeding are in the Caspian 
provinces. The mulberry, however, can be grown 
in most of the provinces ; and there is now before 



the Majless a project granting to a French com- 
pany a non-monopolistic concession for the im- 
portation of silkworm eggs. When this conces- 
sion goes into effect, an adequate supply of 
healthy eggs will be assured and the silk industry 
should advance. 

Tea-planting was started seventeen years ago, 
in the province of Guilan on the Caspian coast; 
and a Dutch tea expert has now been engaged to 
supervise and encourage the further development 
of this industry. 

In the absence of transportation facilities, 
cheap fuel, and the development of its natural re- 
sources, Persia has thus far shown hardly a 
semblance of modern industrial development. 
The carpets and rugs, silks and embroidery, pot- 
tery, silver, and brass of Persia are world- 
famous; but the manufacture of these articles is 
almost entirely by hand, the so-called factories 
at Sultanabad (Aragh) and Hamadan consisting 
of hand-looms. Handicraft work of artistic merit 
and high quality is done in the villages by the 
peasants during the winter months. Persians 
are industrious and skilful workers, adaptable to 
jiew methods, apt at handling machinery, and 
amenable to expert direction; but the conditions 
in the country have rendered the development of 
manufacturing on any large or modern scale eco- 
nomically unjustified. The chief hindrances are 



the high cost of fuel, the lack of other power, the 
absence of transport facilities, and the cheapness 
of hand labor. 

In order to encourage textile manufacturing, 
the Majless had passed a law, shortly before our 
arrival, requiring all officials and employees of 
the Persian Government — ^including those of the 
army, road guards, and police — to wear clothes 
of Persian manufacture, and subjecting to a fine 
any who should be discovered wearing foreign- 
made dress. We were interested in the execu- 
tion of this law from the point of view of getting 
the fines into the treasury; and, fairly well en- 
forced, the law has distinctly encouraged the 
spinning and weaving industry. Requests are 
now frequently addressed to the Ministry of Fi- 
nance for the exemption of imports of spinning 
and weaving machinery from customs duties;, and 
road-tolls. With the approval of the Govern- 
ment, we have in general complied with such re- 
quests. A large spinning factory, to be equipped 
with German machinery, is now under construc- 
tion at Isfahan. Attempts have been made to es- 
tablish iu Persia the manufacture of sugar, 
matches, leather, boots and shoes, and buttons. 
A well-equipped sugar-beet factory stands un- 
used a few miles from Teheran, and a match fac- 
tory is operating at Tabriz. An interesting 
exhibition of Persian home-craft products and 



foreign machinery was held at Teheran in the 
winter of 1923. 

Trades unions and employers’ federations do 
not exist in Persia; but there are merchants’ 
guilds and chambers of commerce. Labor is 
cheap, and the unemployment situation in Persia 
is chronic — vindicated by the large number of dis- 
ponibles ; the number of idle, both rich and poor ; 
the number of low-paid servants, and the hordes 
of beggars that infest certain of the towns. 

There are in Persia no industrial stock com- 
panies or societies, in the Western sense; al- 
though Persians associate quite commonly into 
partnerships and groups. There appears to be 
little liquid capital in Persia available for invest- 
ment, for the incomes of the large proprietors are 
largely in kind; but some Persian money is in- 
vested in foreign securities. 

The unsettled conditions in the country, the 
individuality of the Persian, and the absence of 
adequate means for enforcing laws and contracts, 
have in the past discouraged association for the 
investment of capital in industrial undertakings. 
At present, however, a part of a commercial code 
has been put into execution, stability and security 
exist in the country, the indiscriminate granting 
of contracts and concessions has ceased, oppor- 
tunities for investment are becoming more ap- 
parent, and it is expected that with returning 



prosperity a larger amount of the available capi- 
tal of Persians will be offered for investment in 
the country. Persians with capital to invest are 
already showing marked activity, and the Govern- 
ment and the Majless desire to have them par- 
ticipate in the development of the country with 
or without association with foreigners. Never- 
theless, Persia, for many years to come, must 
depend largely on foreign capital and foreign 

The improvement of transportation facilities 
seems to offer the key to the economic develop- 
ment of this retarded region. 

The principal commercial entrances of the 
country are the ports of Bandar Abbass, Bushire, 
and Mohammerah on the southern coast ; the port 
of Pahlevi on the Caspian; Kasr-Chirin oh the 
Ira^ frontier in the west near Khanikin, tho ter- 
minal of the railroad running north from Basra 
through Bagdad; Julfa on the Russian frontier in 
the northwest, connected by railroad with Tabriz 
and Tiflis; and Duzdab, the Persian head of the 
Indian railway in the southeast. 

Persia has been an isolated country. When 
the tide of the world’s commeree, industry, and 
civilization moved westward, it was left, fig- 
uratively and literally, high and dry. Even in 
the last three years, however, the country has be- 
come more accessible. In 1922, the American 



Mission went to Persia by the Red Sea — ^Persian- 
Gulf route — ^touching at Port Said, Aden, Bom- 
bay, Karachi, Bushire and Basra, traveling by 
rail from Basra up the Euphrates to Bagdad, and 
on to the Persian frontier. To-day, there are 
regular departures of seven-passenger limousines 
from Teheran via Bagdad to Beirut, making the 
trip in about six days. The route through* Russia 
also is open. When transit through the Caucasus 
is fully reestablished, and when the projected 
railroad is built from Bagdad to Haifa on the Red 
Sea, Persia will be brought nearer to the world’s 
markets. It appears probable, also, that con- 
struction in Turkey may bring northwest Persia 
nearer to Trebizond on the Black Sea. 

During the World War, the British built motor 
highways from the Iraq frontier to Kazvin, from 
Duzdab near the Indian frontier to Meshed, and 
other shorter roads, and they extended the Indian 
railways through the Baluchistan desert to Duz- 
dab. The railway, which had been built before 
the war by the Russians, from Julfa to Tabriz, 
with a branch from Sofian to Lake Urumiah, 
was transferred to the Persian Government by 
the Russo-Persian Treaty of 1921, together with 
the highway and other transportation concessions 
which had been granted to Russians. Neverthe- 
less, with these railroads completed and projected, 



steam transportation would lead no farther than 
the doorsteps of Persia. 

To understand the internal transportation prob- 
lem of Persia, one must recall again that it is a 
large country, walled in and crossed by mountain 


ranges, with no navigable rivers except the Karun 
in the southwest, which is navigable for a hundred 
miles with an average depth of four feet. 

The only constructed roads suitable for heavy 


motor traffic are the highway from Kasr-Chirin 
to Kazvin, through Kermanshah and Hamadan, a 
distance of 380 miles; the road from Pahlevi to 
Kazvin through Eesht, a distance of about 140 
miles ; the highway from Tabriz to Julfa, parallel- 
ing the railroad, a distance of 80 miles; and the 
road from Julfa to Khoi in Aizerbaidjan, about 60 
miles long. The road from Kazvin to Teheran, 
a level stretch of 90 miles, is partly constructed 
and is suitable for and is in use by motor traffic. 
There is an unmetaled but passable road from 
Teheran to Meshed, a distance of 584 miles, and 
also one from Teheran to Isfahan, a distance of 
240 miles. The roads from Isfahan to Shiraz 
(290 miles) and from Isfahan through Yezd to 
Kerman (400 miles), as well as the roads from 
Meshed to Duzdab (600 miles), and from Duzdab 
to Kerman (300 miles), from Bushire to Shiraz 
(180 miles), and from Teheran through Ghbm to 
Aragh (about 120 miles) are passable by motor- 
cars. The non-metaled roads are for the most 
part caravan trails, and, naturally, present incon- 
veniences or difficulties to the passage of motor- 
cars at certain points or during certain seasons 
of the year, particularly the rainy season; and 
the passes on the Kazvin-Tabriz and Bushir- 
Isfahan roads are particularly difficult. There 
are several roads in the oil-fields built by the 
Anglo-Persian Gil Company; and there is a de- 



cauville railroad in the southern oil-fields about 
thirty-eight miles in length, used for the transpor- 
tation of the company’s materials. 

There are, of course, numerous other trade 
routes in Persia, probably the most important be- 
ing the route northward to Teheran from Moham- 
merah, and the northwest route from Tabriz to 
Trebizond on the Black Sea. 

When we arrived in Persia the metaled roads 
from Kasr-Chirin to Kazvin, which had been built 
by the British and Russians, and from Kazvin to 
Pahlevi, which had been built by the Russians, 
were rapidly deteriorating; and other roads were 
in bad condition. The transfer of Mr. Mitchell to 
the Ministry of Public Works was followed by 
prompt steps to elfect the necessary emergency 
repairs, keep the roads in passable condition, and 
to make all possible improvements until funds 
would be available for a general program of re- 
habilitation and construction. 

Early in 1925, the Economics Commission of 
the Majless formulated a project of law, which 
was approved by the Government and now awaits 
Parliamentary sanction, setting forth a definite 
program of highway-construction and mainte- 
nance, and providing new taxes to supply the nec- 
essary funds. The project proposes the repair of 
the roads from Kasr-Chirin to Kazvin, from Pah- 
levi to Kazvin, and from Tabriz to Julfa, and the 



construction of the roads from the frontier to 
Kasr-Chirin ; from Kazvin to Teheran ; from Kaz- 
vin to Tabriz; from Khoi to Bayazet; from Te- 
heran to Meshed Hissar ; from Teheran to 
Meshed; from Teheran to Bushire, via Ghom, 
Isfahan, and Shiraz; from Teheran to Moham- 
merah, via Ghom, Aragh (Sultanabad), and Diz- 
ful ; from Meshed to Duzdab, and from Meshed to 
Hendan. The army has done excellent work in 
constructing roads in Azerbaidjan and Khozistan. 

Boad-construction and maintenance had in the 
past been complicated and retarded by the prac- 
tice of granting to private individuals, Persian or 
foreign, contracts for the building of certain roads 
with the privilege, over a period of years, of col- 
lecting the road-tolls on the constructed road. 
During the last two years a number of these con- 
tracts have been annulled by reason of non- 
performance, and it is expected that in the ’future 
the roads will be built and maintained with gov- 
ernment funds. 

When Shuster left Persia, in 1912, there was 
one automobile in the country, a French car be- 
longing to the Shah. During the World War a 
small car of American manufacture was intro- 
duced. The commerce of Persia is still to a large 
extent carried on camels, donkeys, mules, and 
horses, and in horse-drawn wagons ; but automo- 
biles and motor-trucks are now a familiar sight 


Miuza IIassan Khan Piunia Mostowfi ol Mkmalek, in- 




October, 1923 

Mirza IIossbin Khan Pirnia 


Presidei^t of the Majless 

Sardar Moazzam KhorassAni, 
Minister of Public Works 


on the highways and are rapidly increasing in 
number. In 1924, some camel-drivers complained 
to the Parliament and the Prime Minister that — 
to quote the English translation of their petition 
— ^“the speedy traffic of motor-cars at night in- 
flicts casualties on embarrassed camels.” Ac- 
cordingly, the road guards were instructed to re- 
quest the chauffeurs “to drive slowly at night, 
particularly when approaching files of camels.” 

Before the war, a Russian company operated 
a motor-bus service between Teheran and Pahlevi. 
Recently, a Russian-Persian company has been 
formed, called the Auto-Iran Company, which of- 
fered, if the Persian Government would reduce 
the road-tolls, to operate one hundred passenger- 
and freight-cars over the same route. Unable 
in accordance with its treaty obligations to give 
special favors with respect to road-tolls, the 
Government reduced the tolls on all roads ; and it 
is hoped that the new service will soon be in- 

In view of existing transportation routes, a 
large part of Persian commerce has been forced 
to pass through Russia and Iraq. As a feature 
of the country’s policy to make itself economically 
independent,* Persians are looking toward Moham- 
merah and Trebizond as future outlets for com- 

In accordance with the Russo-Persian Treaty of 


1921, the Tabriz- Julfa Railroad had been trans- 
ferred as a gift to the Persian people. Aside 
from the monetary claims against it, which are 
considered a debt of the Russian Government, 
the actual condition of the railroad was deplor- 
able. For a time, on account of the condition of 
the ties and the locomotives, the trains ran a poor 
second to the camel caravans on thre highway ; but 
rehabilitation is now under way; we have recently 
purchased two more locomotives, thirty cars, and 
a year’s supply of fuel-oil; and the cross-ties, 
which had become so rotten that spikes could be 
pulled out with one’s fingers, are being replaced. 

Lying west of Tabriz, between the city and the 
Turkish frontier, stretches the beautiful expanse 
of Lake Urumiah. From Sofian, northwest of 
Tabriz, a branch of the Tabriz-Julfa Railroad ex- 
tends to the lake at Sharif-Khaneh. Some dis- 
tance north of the lake is the important trade 
route to Trebizond, passing through Marand and 
Khoi. Northwest of it is the country of the Kurd- 
ish tribes; and around the southern end lies the 
remarkably productive agricultural regions of 
Urumiah, Sodj-Bolag, and Maraga. 

There existed on the lake a fleet of seven motor- 
driven boats and fifteen barges, which, with ex- 
tensive shore installations, were in good condi- 
tion. The entire navigation on the lake was in 
the hands of the Persian Government, being man- 



aged by the administration of the Tabriz-Julfa 
Railroad. There were also a few boats and barges 
belonging to an Englishman named Stevens and a 
Russian named Bodaghiantz. The boats were in 
poor condition, and the properties on shore were 
of little value; but, resting their case on various 
documents and contradictory decrees from Per- 
sian governments of the past, Stevens and Boda- 
ghiantz laid claim to the monopoly of navigation 
on the lake. Finally, some months after our ar- 
rival, their claims and properties were purchased ; 
and the Persian Government thus possesses, free 
of any claim, the navigation rights and an ade- 
quate fleet of boats, which are already an excellent 
source of revenue for the Government. Repair 
cost is reduced to a minimum because there is no 
fish or animal life in the lake and the dense salt 
content prevents decay of timbers. The boats 
and barges proved of great value in the subjuga- 
tion of the Kurds. 

The importance of the Duzdab extension of the 
Indian railways, offering an outlet for the wool 
and cotton of Khorassan and the grain of Seistan, 
is shown by import and export figures. Before 
the World War the total trade through Duzdab 
amounted to less than a half-million tomans, but 
in 1922-23 it had risen to almost nine million 
tomans. Major Hall has made the interesting 
proposal that a light railway be constructed from 



Seistan to Duzdab, a distance of about one hun- 
dred and thirty-five miles, which would facilitate 
the shipment of Seistan wheat to the Indian mark- 
ets, difficult at present, due to the high cost of 
animal transport. 

Many years before the arrival of the Amer- 
ican Mission in Persia, projects for railroad- 
construction had been elaborated and discussed, 
and had been the subject of diplomatic correspond- 

On September 16, 1888, Nasr ed Din Shah gave 
assurance to the British Government that when- 
ever a railroad concession should be given in the 
north, a concession for a railroad from Teheran 
to Shustar would be given to a British company ; 
that no railroad concession in the south would 
without consultation with the British Government 
be granted to any foreign company ; and, further, 
that no permission would be given for the con- 
struction in Persia of any but commercial rail- 
ways. In 1911 and afterward, there was further 
correspondence with the British Legation at Te- 
heran and with British interests ; and letters were 
addressed by Prince Ferouz, then Persian Min- 
ister of Foreign Affairs, to the Persian Bailway 
Syndicate, Ltd., with respect to options for the 
construction of railways from Mohammerah 
through Khorammabad to Teheran and from 
Khanikin to Teheran, with a branch to Pahlevi. 



The period of time mentioned in the correspon- 
dence, having expired without any further de- 
cision or agreement and* apparently without the 
exchange of consideration, the syndicate re- 
quested the Government to pay for the expenses 
of the preliminary surveys which had been per- 
formed by the syndicate on behalf of the Govern- 
ment. It appears, therefore, that there is in 
existence at the present time no concession or con- 
tract for the construction or operation of a rail- 
road in Persia.^ 

There are in Persia a number of short railways, 
which are of local industrial importance, but bear 
no relation to the general transportation problem 
of the country, for example : the tracks in the oil- 
fields; the railroad at Teheran, nine miles in 
length, from the city to the shrine of Shah Abdul 
Azim; the Resht-Pir Bazaar Railroad, five miles 
long; the Punel-Mordab Railroad in Guilan, a 
very short line not now operating; the Tooleh 
Railroad in Guilan, extending from the coast into 
the forests, a distance of twenty-four miles, now 
in a state of ruin; the Resht-Selki Sar Railroad, 
twenty-eight miles long, built for lumbering pur- 
poses and now almost totally destroyed; the 
LijarM-Ghazian line at Resht, laid for the trans- 

iWith the exception of a line about five miles long, running 
from Rei^t to Pir-Bazaar on the Caspian Coast, the lease of 
which was recently given. 



portation of stone and cement from the sea, now 
in a state of complete min; and the short line 
built to the iron-mine at Amol in Mazanderan, but 
now ruined. 

In May, 1925, as I have mentioned, the Majless 
passed a law establishing a government monopoly 
of sugar and tea, the proceeds of which, estimated 
at five million tomans annually, are to be devoted 
to the construction of railways. 

It is recognized, that while railroads are neces- 
sary and inevitable in a progressive and develop- 
ing Persia, they must be based on and fed by a 
modern system of highways; and it is doubtful, 
furthermore, whether an extensive or expensive 
system of railroads is practicable in Persia. On 
paved highways, much of Persia’s trade may be 
carried in motor-tmcks; and the initial cost of a 
system of motor-truck transport will be insignifi- 
cant compared with that of a railroad, to say noth- 
ing of the lower operating costs and the greater 
flexibility of motor transport. 

Persians, however, are alert not merely to the 
economic advantages of railroads but also to their 
social and political benefits. They feel that rail- 
roads will stir, educate, and modernize the people, 
and will contribute, more than any other procur- 
able influence, to the unification and better admin- 
istration of the country. In this, they are un- 
questionably right; and the ultimate value of an 



investment by the Persian Government in rail- 
roads cannot be fixed solely by the tangible fiscal 
and business estimates which might be determin- 
ing in a Western country. 

The principles which are now held in view in 
Persia, in the discussion of the transportation 
problem, are that railroads or any other improved 
transportation facilities must be commercial in 
purpose, and principally for the interest of that 
country, and not, except incidentally, for the mili- 
tary, political, or commercial interests of any 
other country ; that they must lead to independent 
or competing outlets; that they should be con- 
structed by foreign firms under contracts, and 
after construction should be owned and operated 
by the Persian Government, or operated by a pri- 
vate company under lease. 

Taking Teheran as the political and economic 
center of gravity in Persia, and with the above 
principles in mind, Persians have visions of a rail- 
road running from the capital, southward to 
Mohammerah on the Persian Gulf; and another, 
perhaps, connecting in a northwesterly direction, 
by way of Tabriz, with Trebizond on the Black 
Sea. More ambitious imaginations picture a 
south-north trunk-line, from Mohammerah to Pah- 
levi or Bandar Jaz on the Caspian, and a west- 
east line from Khanikin and Kasr-Chirin to Duz- 
dab. The project for a pipe-line and railroad 



from the Iraq oil-fields to Haifa on the Mediter- 
ranean, should be reckoned with. If this rail- 
road is ever constructed, it will provide the short- 
est and presumedly the cheapest route for com- 
merce between Persia and western Europe; and 
would naturally lessen the value of the Moham- 
merah route or any other route into Persia. 
The present trend of Persian trade with the 
West, however, is toward the Mohammerah- 
Khorammabad route. 

During the past two years, aviation has taken 
its place in the air and in the imagination of Per- 
sia. Army aeroplanes have operated in Khozi- 
stan and in the Turkoman country ; and a German 
company, applying for an air-mail contract, has 
flown its planes, with many Persian passengers, 
over Teheran and to and from Baku. • 

The telegraph was introduced into Persia in 
1862. Up to 1909, it was farmed out to individu- 
als under contract, but since that date it has been 
operated directly by the Government, through the 
Ministry of Posts and Telegraphs. Persia has 
been a member of the International Telegraphic 
Union since 1869. There are now about one hun- 
dred and fifty telegraph offices in the country, and 
the lines have a total length, approximately, of 
ten thousand miles. In 1922-23, the telegraph 
system transmitted in the interior over seven 
hundred thousand private telegrams and about 



two hundred thousand government telegrams. 
There are also two foreign telegraph lines in 

A Persian telephone company was established 
at Teheran and given a concession by imperial 
farman about twenty years ago. It has twenty- 
one share-holders, and five hundred and thirty- 
five shares of a par value of a thousand tomans 
each. Operating in most of the cities and towns 
of Persia, its subscribers in Teheran numbered 
1136 in 1922-23, and 1326 in 1924-25 ; and during 
the same three years the number of subscribers 
rose, in Kermanshah, from 89 to 145; in Hama- 
dan, from 104 to 144; and in Yezd, from 29 to 47. 
The company is now putting its wires under- 
ground in Teheran, and is making other plans to 
improve its service. There are no long-distance 
telephone lines in Persia, the longest line extend- 
ing about a hundred miles. 

The army purchased from the Russian Govern- 
ment a high-power wireless plant which was 
erected and, in the presence of the Prime Min- 
ister, enthusiastically dedicated in the spring of 
1925. The main station near Teheran is said to 
be powerful enough to communicate with Euro- 
pean stations. 

When the American Mission arrived, the com- 
merce of Persia was suffering acutely from the 
effects of the World War, although it had al- 



ready begun to show hopeful signs of recovery. 

The principal imports of Persia are sugar, cot- 
ton material, and tea ; the principal articles of ex- 
port (excluding petroleum and petroleum prod- 
ucts) are wool, carpets, opium, raw cotton, and 
fresh and dried fruits. In the figures which fol- 
low, there are excluded from calculation the ex- 
ports of petroleum by the Anglo-Persian Oil 
Company, as well as the importations, during the 
war and afterward, by foreign troops. Of the 
real trade of Persia, exports had fallen, in 1918- 
19, to less than 20 per cent, of the total ; but they 
had risen in 1922-23 to 33 per cent, and in 1923-24 
to thirty-six. The adverse balance, which had 
reached 44,240,300 tomans in 1919-20, had fallen 
to 31,354,400 tomans in 1922-23 and 30,875,700 
tomans in 1923-24. According to available fig- 
ures, the adverse balance for 1924-25 should not 
exceed 28,000,000 tomans. 

The “invisible” exports of Persia are difficult 
to estimate. They include the amounts spent by 
foreign representatives, residents, and travelers in 
the country, the Anglo-Persian Oil Company roy- 
alties, and the payments of this company in Per- 
sia for labor and supplies, amounting, it is stated, 
to about four hundred thousand pounds sterling. 

In the face of the large adverse balance of 
trade, importers, unable to buy foreign currency 
to pay for their foreign purchases, began in some 



instances to export Persian silver currency at its 
bullion value. Fearing that the country would be 
drained of its silver, and hoping to check the im- 
portation of foreign goods, particularly luxuries, 
the Majless, in a state approaching alarm, passed 
a law prohibiting the export of gold and silver. 
We did our best to enforce this law, but smuggling 
has been widely practised. At present, however, 
silver is flowing into Persia and the execution of 
the law is of little practical importance. 

There was also seriously discussed, in the Maj- 
less, a project of law prohibiting the importation 
of luxuries; but it was realized that most of the 
imports of Persia are necessities, and that in any 
event the Government might better turn its at- 
tention to increasing exports than artificially re- 
stricting imports. The law was not passed. 

Russia held first place in the export trade of 
Persia until 1918-19, when it was displaced by 
Great Britain. In the import trade of Persia, 
Russia also led until 1915-16, when it was sup- 
planted by Great Britain. In 1923-24, Persian 
importations from the British Empire (including 
India) amounted to 43,724,091 tomans, while those 
from Russia totaled only 10,515,879 tomans. 

In 1913-14, Persian exports to Russia amounted 
to thirty million tomans ; in 1921-22, they had de- 
clined to less than three million tomans; in 
1922-23, they still stood at little more than six mil- 



lion tomans; but in 1923-24, they had already 
risen to about sixteen million tomans. The open- 
ing of trade with Russia is all important to Per- 
sian commerce. Steps to this end have been 
taken, a Russo-Persian Commercial Treaty hav- 
ing been signed and submitted to the Majless for 

In view of the importance to Persia of trade 
with and through Russia, the monopolization of 
trade by the Soviet Government is of great in- 
terest. In Persia, there is no tendency to commu- 
nism. The Government exorcises important eco- 
nomic functions, but it has never, so far as I can 
see, shown any tendency to subvert individual 
initiative in industry or to extend its economic 
functions except when clearly necessary in the in- 
terest of the Treasury and public welfare. Per- 
sian merchants and producers, moreover, show 
little inclination to combine to protect their busi- 
ness and prices. As a result, their exports to or 
through Russia are at the mercy of the Soviet 
trade monopoly. In the case of the products of 
the north, such as rice and sugar, the monopoly is 
in a position to refrain from purchasing until 
prices fall; while the Persian producers, acting 
individually, have no means to keep prices up. 
Eventually, the Persian Government may be com- 
pelled to take action to protect the interests of its 



The Soviet Government apparently follows, 
with regard to its external operations, the prac- 
tice of establishing associations with Soviet con- 
trol and Persian participation. In this respect, it 
appears to apply to Persians in their own country 
substantially the same policy as to foreigners do- 
ing business in Bussia. 

The famous carpets and rugs of Persia, consti- 
tuting a unique industry of the country, and its 
most valued export, have been for many years 
in serious danger, because of the importation and 
use of aniline dyes and to the competition of 
China, In 1909, the importation of aniline dyes 
was prohibited, but this measure was ineffective, 
due to the smuggling across the exposed frontiers. 
Later, a special tax was imposed on exported 
aniline-dyed carpets, but this measure met with 
the strong opposition of the merchants, and it has 
not been possible to levy a tax high enough to be 
effective. Since March 21, 1922, this tax has been 
fixed at twelve per cent, ad valorem. A Belgian 
expert is employed by the Persian Government to 
examine the carpets for aniline. In spite of these 
measures, the carpet industry is in serious dan- 
ger. In order to save it, it will be necessary not 
only to combat aniline but also to meet Chinese 
competition by restoring the historical and artis- 
tic purity of the old Persian patterns. Steps to 
this end are being taken. 



In Persia, there are three foreign banks of im- 
portance. The Imperial Bank of Persia acts for 
the Government in connection with the service of 
the foreign funded debt, receiving the southern 
customs receipts as they fall due, paying the cou- 
pons in London, and delivering the balance to the 
Persian Treasury. It likewise reQeives from the 
provincial financial agents tax revenues for re- 
mittance to Teheran, and effects remittances of 
government funds to the provinces without charge. 
It furnishes the Ministry of Finance with tem- 
porary over-drafts pending the collection of the 
revenues. It cooperates in the matter of nickel 
coinage, and in the purchase and importation of 
silver for coinage at the Imperial Mint. Should 
the Persian Government hereafter decide to adopt 
a gold standard, the Imperial Bank of Persia is 
bound by the terms of its concession to assist the 
Government to that end. The bank is a British 
institution, and, in return for the concession that 
it holds, pays the Government six per cent, of its 
net profits, with a minimum yearly payment of 
four thousand pounds. The Imperial Ottoman 
Bank has several branches in Persia; and there 
has recently been established in Teheran and 
northern Persia the Russo-Persian Bank, whose 
principal business is in connection with Russian 




I N 1901, an Englishman, William Knox 
D’Arcy, obtained from the Shah a conces- 
sion for the exportation, refining, transpor- 
tation, and sale of petroleum, natural gas, asphalt, 
and ozokerite, throughout the Persian Empire 
with the exception of the five northern provinces 
along the Caspian Sea. Under the concession, 
which was to run for sixty years, the Persian 
Government receives sixteen per cent, of the net 
profits. Oil was struck in 1908, and in the follow- 
ing year the Anglo-Persian Oil Company was or- 
ganized, in which the British Government has 
since 1914 held two thirds of the shares. The 
company has established two technical schools for 
the training of young Persians in the technical 
phases of the oil business ; it has inaugurated va- 
rious hygienic measures ; and it has established in 
the oil-fields three large and well-equipped hospi- 
tals and quarantine establishments, with eighteen 
European physicians in the service of the com- 



The island of Abadan, which fourteen years ago 
was almost deserted, has become, since the erec- 
tion of the company’s refinery, a city of nearly 
twenty-five thousand inhabitants. 

The main field of the company is in the region 
of Maidan-i-Naphtun, in southwest Persia. Out- 
side this field, it is conducting drilling operations, 
and it reports that it has struck oil of high quality 
at Kishm and near the Iraq-Persian frontier. 
The output of ci'ude oil has shown a steady in- 
crease, from 233,962 tons in 1913-14, to 3,714,109 
tons in 1923-24. The wells are shallow, and give 
a steady flow of petroleum of high-grade quality. 
The remarkable well known as F 7, drilled in 
1911, is stated by the company to be still giving 
an undiminished flow, having produced, up to 
1924, 12,000 barrels daily, or a total of over 
1,400,000,000 gallons. Two ten-inch pipe-lines, 
about one hundred and fifty miles in length, with 
an annual capacity of five million tons, have been 
constructed from the oil-field to Abadan, with 
three pumping-stations. 

Due, it is explained, to market conditions, the 
royalties have not kept pace with the increased 
production, and the decline in this revenue had 
aroused the apprehensions of the Persian Govern- 
ment. Nevertheless, at the time of our arrival, 
there was no proper organization of the govern- 
ment departments to study and handle matters 



relating to southern oil. Under the concession, 
the Persian Government is entitled to appoint 
an oil commissioner, who receives from the com- 
pany a salary of one thousand pounds. When 
I went to Persia, this official was a young man 
who showed no signs of ability, and who ap- 
parently looked upon his job as a sinecure which, 
as it had been obtained by influence, could be 
retained in the same way. He had no files ; there 
were constant disputes between him and the 
Persian Legation at London. In Teheran, while 
the meager communications sent by the oil com- 
missioner led to no action, the Ministries of 
Foreign Affairs, Public Works, and Finance all 
asserted their jurisdiction over them. The first 
step in bringing order out of confusion, was to 
obtain the recognition of the jurisdiction of the 
Ministry of Finance over all matters connected 
with the royalties payable by the company, and 
the right of the Ministry of Public Works to 
handle all questions pertaining to the physical con- 
ditions and operations in the fields. A capable ex- 
minister of finance, possessing a good knowledge 
of English, was then appointed oil commissioner 
at London, and the Legation at London was in- 
structed to keep its hands off. 

In the northern part of Persia, — the region not 
included in the Anglo-Persian concession, — there 
are reported to exist, particularly in the provinces 



of Mazanderan, Ouilan, and Azerbaidjan, numer- 
ous indications of petroleum, similar to those 
which occur in southern Persia and in the Mosul 
region of Iraq, although probably not so extensive 
or significant. 

Relative to this region, there exist some claims 
based on alleged grants to a Russian named 
Khochtaria, the legality of which is not recognized 
by the Persian Government, but which were sold 
by Khochtaria to the Anglo-Persian Oil Company. 

When Mr. Alai was accredited to Washington, 
he announced that it was the desire of his Govern- 
ment to negotiate with American companies for 
the granting of an oil concession in north Persia, 
to be coupled with a loan of ten million dollars. 
During the next two years, negotiations were 
actively pursued in the United States with the 
Standard Oil Company of New Jersey, and in 
Persia with the Sinclair Exploration Company, 
which had sent a representative to Teheran. The 
Standard, in connection with its negotiations, 
effected an arrangement with the Anglo-Persian, 
whereby the latter, in return for the interest it 
claimed in the fields, should receive fifty per cent, 
of the output; the negotiations of Sinclair, were 
conducted, so far as I am informed, with no recog- 
nition of the claims of the Anglo-Persian. 

At the time of my arrival in Persia the negotia- 
tions had reached a stage at which detailed pro- 



posals had been submitted to the Persian Govern- 
ment by both American companies. Both pro- 
posed that the concession should be worked by a 
subsidiary company, the capital stock and man- 
agement of which should be permanently’in Amer- 
ican hands. The most marked difference in the 
two proposals was that the Standard desired the 
royalty to be based on a percentage of the crude 
production, while the Sinclair proposed that the 
royalty be a percentage of the net profits. 

A glance at the map of Persia will show that 
any oil produced in north Persia, in excess of that 
sold in the local market, will have to be trans- 
ported to or through Russia, to or through Iraq, 
to or through Turkey, or through south Persia to 
the sea. Any of these suggested routes of trans- 
portation will present extreme difficulty. Which 
would be the more practicable, would depend on 
the location of the producing territory, and, it 
would seem, on the relations established by the 
concessionary company with the Russian, Turkish, 
and Iraq authorities, as well as with the Anglo- 
Persian Oil Company, which holds the monopoly 
of oil-transport in the south. 

Had the Persian officials who were then in 
power, acted with courage and decision, with a 
view only to the interests of Persia, had they 
gotten the best terms possible and then granted 
the concession to one company or the other, all 



would doubtless have been well. Instead of doing 
so, the Government of the time submitted to the 
Majless a project of law incorporating certain 
of the provisions of both draft concessions. This 
law, after months of discussion, was passed by the 
Majless, and was duly circulated for the accept- 
ance or rejection of American companies. The 
Persian officials consulted with me freely on this 
matter. The Persian Government had declared 
that it was its policy to grant the oil concession 
to a purely American company. Between the two 
American companies which were negotiating for 
the concession, I had no preference, to the extent 
that they offered terms which in my opinion were 
practicable and in the interest of Persia. I 
recognized clearly, however, the danger of delay, 
urged the Government to make a decision in favor 
of one company or the other, and warned against 
embodying in a law those technical provisions 
which are usually subject to negotiation with 

The terms proposed in the law were understood 
to be unacceptable by the Standard but acceptable 
with some modifications by Sinclair. The revised 
Sinclair concession was thereupon submitted to 
the Majless for approval; but at this juncture, the 
summer of 1924, the Sinclair representative left 
Teheran. Then followed the cancellation by the 
Soviet Government of the Sinclair concession in 



the island of Sakhalin, and, early in 1925, the Sin- 
clair Company telegraphed the Persian Govern- 
ment that, in view of the attitude taken by the 
Soviet authorities, the company could no longer 
go on with the northern oil concession. 

For the impasse that occurred in this affair, 
the Persian Government should not be too se- 
verely criticized. Connected as the concession 
came to be, in the minds of Persians, with the 
vague “special interests" of neighboring powers, 
the Government — conscious of the grave mistakes 
that had been made by Persian governments in 
the past, in the granting of concessions; deter- 
mined to take no step which should cause later 
regret; having no impartial technical adviser in 
Teheran, negotiating with one company in 
Teheran and with the other in New York — can 
hardly be blamed for an excess of caution; and it 
can be a matter of little surprise that the question, 
becoming a political issue, should have been 
brought to stalemate. It appears possible, how- 
ever, that a solution may soon be found. 

The granting of the northern oil concession, 
although important, is of course in nowise the 
open sesame to Persian prosperity. Neither is 
it, in my opinion, an indispensable vehicle for 
the flotation of a loan. There is need, however, 
of cheaper petrol in Persia, for at present it sells 
in Teheran at about one dollar a gallon. If pe- 



troleum could be produced and refined in north 
Persia so as to be supplied more cheaply, needed 
encouragement would be furnished to motor-truck 

The negotiations with the Soviet Government 
concerning the Caspian fisheries, reveal some of 
the complications in Persia’s economic situation, 
and in the position of the American Mission. It 
was far from my wish to engage in controversy 
with any foreign legation; but when a legation 
adopts the role of applicant for a concession and, 
like many other agents of business concerns in 
Persia, attempts to get terms which are contrary 
to the interests of the country, it is difficult to see 
how I can treat the legation’s proposals as differ- 
ent from any other business propositions. State- 
ments, made by me according to my contract, 
regarding an industrial concession, should hardly 
be construed as unfriendliness, until at least my 
position has been met by argument in economic, 
not political, terms. 

Before the World War, the sturgeon fisheries 
along the Caspian coast of Persia were an im- 
portant and developing industry. Several thou- 
sand persons were employed, and, according to 
an appraisal in 1918, the properties and equip- 
ment used in the fisheries were valued at over 
three million tomans. 

A concession for the monopoly of these fisheries 


was granted to a Russian named Stepan Lion- 
osoff, in 1876. It was renewed in 1879, 1886, 
1893, and 1896; and in 1906, the Persian Govern- 
ment extended the term of the concession to 1925. 
In 1916, the heirs of Lionosoff organized the K. Y. 
Lionosoff Company, with a capital of about nine 
million gold rubles. During the war, difficulties 
arose over the payment of royalties and in 1918 
the Persian Government notified the abrogation 
of the concession. The Russian Legation, it 
should be noted, protested the abrogation of the 
Lionosoff concession. On July 19, 1919, the 
fisheries were rented to a Russian named Vanitz- 
off, for fifty per cent, of the net profits; but, 
aside from the probable invalidity of this contract 
in the first place, the lessee appears to have paid 
no rent to the Persian Government. During the 
war the port of Pahlevi was occupied by the 
Russians, and at the close of the war the impor- 
tant fishery installations of Lionosoff at that 
place, fell into the possession of the Soviet 

Lionosoff had establishments at various places 
on the coast, — Astara, Pahlevi, Ilassan Kiadeh, 
Karasoo, Meshed Hissar and Estrabad, — but 
those at Pahlevi, which 1 have seen, wore the most 
important. Here are warehouses, docks, curing 
vats, refrigerators, a modern power plant, bar- 
racks and houses for the employees, a hospital, 



and a library. It is a plant that would do credit 
to any industrial city. 

In the Russo-Persian Treaty of 1921, Article 
XIV refers directly to the fisheries. A literal 
English translation of the Persian text of this 
article reads as follows : 

Realisdng the importance of the fisheries of the south- 
ern shores of the Caspian Sea for the normal pro- 
visioning of Russia, the Persian Government is ready, 
after the expiration of the legal validity of its present 
obligations with respect to these fisheries, to make an ar- 
rangement with the Food Department of the Soviet 
Republic of Russia with respect to the fisheries, the 
terms of which arrangement will be prepared in the 

The Persian Government is also ready to examine, 
with the Soviet Government of Russia, the means of 
making already now available the produces of tlie above- 
tmentioned fisheries to the Food Department of the 
Soviet Republic, and before the above-mentioned terms 
are prepared. 

The gist of this article seems to me to be that at 
the expiration of existing rights (presumably re- 
ferring to those of the Lionosoffs), the Persian 
Government shall conclude an agreement with the 
Soviet Food Department concerning the fisheries, 
with the object of insuring the normal supply of 
fish to Russia, and that prior to the expiration of 
existing rights, the Persian Government was 



ready to discuss with the Soviet Government the 
method by which in the meantime the Soviet Pood 
Department should be assured of a sufficient 
supply of the products of the fisheries. This 
article should, moreover, be read in the light of 
the unselfish principles and renunciations re- 
peatedly and solemnly set forth by the Soviet 
Government in the treaty. 

The Soviet authorities continuing in occupation 
of the fisheries, the Persian Government was in- 
duced, in the spring of 1922, to give them the 
monopoly of the purchase of fish in Pahlevi and 
Hassan Kiadeh, in return for a payment of fifty 
thousand tomans. This grant was evidently for 
only one year, and, following the refusal of the 
Soviet authorities to pay the ordinary customs 
duties and taxes on fish, they were also exempted 
from these charges by the Persian Government. 

In accordance with Article XIV of the treaty, 
representatives of the Soviet and Persian Govern- 
ments met on November 20, 1921, to discuss the 
question of the fisheries. This joint commission 
met again on February 11, 1922, with no apparent 
result; but on October 28, 1922, a protocol was 
signed by representatives of the Persian and 
Soviet Governments, which says: 

As . per Article XIV of the Treaty of 26 February, 
1921, concerning the Caspian Sea fisheries, the needed 
agreement should be made after the expiration of the 



period of the contract that the Persian Government has 
with the third person. And as the differences arising 
between the Persian Government and the firm of 
Lionosoff relating to the previous contract, is not yet 
settled, we take the decision in common agreement that 
our sitting be suspended in order that the differences 
between the Persian Government and the Lionosoff be 

In the meantime, acting on the protests of the 
Lionosoffs against the abrogation of their conces- 
sion, the Persian Government appointed an arbi- 
tration commission consisting of three distin- 
guished Persian jurists, who apparently pos- 
sessed full power to determine the rights of the 
former concessionaires. The commission issued 
its decision November 8, 1922, to the effect that the 
abrogation of the Lionosoff concession by the Per- 
sian Government had been illegal, and that, in 
compensation for the damages sustained by the 
concessionaires, the period of their priviliges 
should be extended fifteen years, on condition that 
fifty per cent, of the net profits should be paid to 
the Persian Government. 

This was the state of affairs, with regard to the 
fisheries, on the arrival of the American Mission. 
During the next two years, discussions took place 
between the Persian Government and the Soviet 
Legation without result. Leon and Veronica 
Lionosoff reside at Teheran, and continue their 



protests; but, Martin Lionosoif went to Bnssia, 
and was reported several months ago to have sold 
his fishing properties in Astara to the Soviet 
Government, although Article VI of the 1893 con- 
cession, which was apparently still in force, pro- 
vides that “all the workshops and material of the 
lessee will be regarded as a guarantee by the 
Persian Government and the lessee will not have 
the right to sell or transfer them to another per- 
son or persons.” 

In October, 1924, the Soviet representatives 
finally proposed that, subject to the approval of 
the Majless, the fisheries should be leased to a 
company, consisting of the Soviet Government 
and the Persian Government, in which each gov- 
ernment should possess one half of the shares and 
one half of the directors. Such an agreement 
seemed to me to offer no practicable, business- 
like solution; and on October 4, 1924, I advised 
the Persian Government against accepting it. A 
few days later the Soviet Government offered the 
Persian Government a check for one hundred 
thousand tomans, ostensibly to pay for the fishery 
products which it was exporting. This check we 
declined to receive into the treasury. 

On June 5, 1924, the Russian Legation at 
Teheran published the following bit of news in its 
“Moscow Wireless”: 



Inasmuch as the actions taken by the American advis- 
ers with respect to financial reforms in Persia have been 
without result, the question was discussed a few days 
ago in the Persian Parliament and it was stated that it 
is no longer necessary to incur losses from the American 
Mission, particularly in view of the incompetence of Dr. 
Millspaugh in financial matters. Some of the politicians 
insisted on giving Dr. Millspaugh -one year more to 
demonstrate his capacity in finance, but, nevertheless, 
the dissatisfaction with him is increasing, especially be- 
cause of his political interferences.^ 

The editor of the paper added this remark : 

This rumor is quite untrue. No such discussion has 
been made in the Parliament regarding Dr. Millspaugh 
and no political interference is made by him. The be- 
ginning of this rumor is due to the action of Dr. Mills- 
paugh in protecting the rights of the Persian Govern- 
ment in connection with the fisheries of Hassan Kiadeh. 

A day or two after, the Minister of Finance 
published the following official contradiction : 

The news published in Moscow ^s wireless bulletin is 
absolutely untrue. The Persian Government appreci- 
ates Dr. Millspaugh ’s services in the centralization of the 
revenues and the control of the governmental expendi- 

Under date of October 20, 1924, a wireless des- 
patch to the ‘^New York Times'^ from Moscow 
contained the following statement, which may not 

1 From the Persian newspaper **lTan” of June 5, 1024. 



be authentic, but, so far as I know, has never been 
disclaimed : 

American financial experts appointed to organize 
Persian finance have failed in their task to balance the 
budget and have driven Persia to the brink of financial 
ruin, says M. Shumiatzky, Soviet Minister to Persia, who 
arrived in Moscow today on a short visit. 

A few weeks later, the Soviet Legation having 
indicated a friendly desire to discuss the matter 
with me, I proposed, in a spirit of conciliation and 
compromise, that after a settlement of the claims 
of the Lionosolfs, and the acquisition of their 
properties in a legal manner, the fisheries should 
be controlled by the Persian Government but the 
Soviet Government might be given minority par- 
ticipation. In my proposal, I included, of course, 
definite assurances regarding the normal supply 
of Persian fish to the Soviet Food Department. 
On learning my proposals, the representatives of 
the Soviet Legation immediately ceased their dis- 
cussion with me, and insisted that the original 
proposition of the Legation should be submitted 
to the Majless. This was done, and the matter is 
now awaiting parliamentary action. 

It is true that there is a slight difference be- 
tween the Russian and Persian texts of Article 
XIV ; but, according to the treaty, both texts shall 
be controlling. Regardless of treaty interpreta- 
tion or prior rights, the facts are that since the 



fall of 1922 the Soviets have occupied the fisheries 
of Guilan, they claim the ownership of the fisheries 
of Astara, a Soviet consul has installed himself in 
one of the Lionosoif buildings in another place, 
and the Soviet authorities have purchased, pre- 
pared, and exported fish and caviar. Their 
actions with regard to the fisheries have been 
taken, so far as I know, without the permission of 
the Persian Government ; and it may be presumed 
that no such permission has been or could be 
legally g^ven without consultation with me, in 
accordance with my contract, and without the ap- 
proval of the Majless as prescribed in the Consti- 
tution. The properties of the Lionosoffs have 
meanwhile suffered constant deterioration and 
spoliation. We have rented the river fisheries, 
and have thus obtained a trifling amount of reve- 
nue, which has barely covered the subsidies paid 
to the two Lionosofis. 

It is hoped that if the Majless declines to ap- 
prove the proposed concession, the Soviet Govern- 
ment will see that in the fishery matter, as in 
others, the course most likely to be compatible with 
its material interests, — ^to say nothing of its moral 
and legal obligations, — ^is to respect the clear right 
of Persia, in the absence of treaty restrictions, 
to dispose, as a sovereign nation, of its own re- 
sources within its own territory. 

In the greater part of Persia there are virtually 


no natural forests. In the north, along the Cas- 
pian coast and on the slopes of the Elburz Moun- 
tains, there are extensive forests. These are 
largely state property; but there has been in the 
past little attempt on the part of the Government 
to g^ard its forest wealth. Cutting and exporta- 
tion have been by official permission, but the pro- 
visions made for reforestation have been inade- 
quate. Pending the enactment of a forest law, by 
the Majless, the Council of Ministers passed on 
March 7, 1925, a decision which stipulated that all 
forests were to be considered as public property 
in the absence of documentary proof of private 
ownership; that the Government reserved the 
right in all forests, whether governmental or pri- 
vate, to supervise methods of reforestation; that 
the leasing of State forests and permission for 
cutting, subject to the technical supervision of the 
Ministry of Public Works, shall bo by public 
bidding, with the approval of the Ministry of 
Finance ; that the industrial trees to be especially 
protected are walnut, box, myrtle, oak, pine, mul- 
berry, and all black trees; that the felling of 
industrial trees in private forests without the 
authorization of the Ministry of Public Works, is 
prohibited, and that such authorization, when 
given, must include various safeguards, including 
an engagement to plant five trees in place of each 
one felled. The Majless has been asked to au- 



thorize the employment of a German forest ex- 
pert; and it is expected that when he arrives a 
comprehensive forest policy will be formulated 
and put into execution. 

The mineral resources of Persia, with the 
exception of petroleum, are in general unex- 
plored, unconceded, and unexploited. Under- 
ground mines are considered as government 
property. A temporary mining code, which has 
not yet been approved by the Majless, is observed 
in practice by the Ministry of Public Works ; and 
an agreement was reached, in 1924, between the 
Ministries of Public Works and Finance, in which 
the latter ministry is given full control over the 
financial provisions of all mining leases. Since 
no adequate geological surveys have been made 
in Persia, it is impossible to specify or to evaluate 
her underground riches ; but available information 
indicates an amazing variety of mineral deposits. 

Iron is said to be widely distributed, but the 
exploitation of only two iron-mines has been 
authorized, by concession. In Mazanderan, near 
the Caspian coast, it is found in proximity to 
coal. Various coal-mines in Persia are leased and 
worked, several of them being a few miles from 
Teheran. Two lead-mines are under lease ; others 
have been worked but are now abandoned ; while 
still others have never been exploited. Mines of 
alum, orpiment, sodium sulphate, sulphur, and 


Tadayon, LEADER OF THE Majority Fiuoitz Miuza, Dei'iity ok Ker- 


Aubab Kiiaikuosrow Shaiirokii. 



Mirza Moiiambd Ali Khan 
Forougiii (formerly Zoka ol 
Molk), Minister ok Finance 


graphite are under lease and in process of de- 
velopment. Mineral waters Of all kinds occur in 
different parts of Persia, the best known being 
in the neighborhood of Lake Urumiah. Numerous 
salt-mines are leased by the Government, bringing 
in a revenue of forty thousand tomans annually. 
There is a valuable turquoise-mine in the province 
of Khorassan, said to produce the best turquoise 
in the world. Other turquoise-mines are located 
in Kerman, Ghom, Fars, and Teheran Provinces. 
Copper is widely distributed in Persia, but the 
mines, a few of which are under lease, are little 
worked. Valuable deposits of oxide of iron, on 
the Persian Gulf, are under concession to a 
Persian merchant. Tlie list of other minerals 
which have been reported in Persia includes 
arsenic, realgar, borax, chromium, cobalt, nickel, 
emery, fire-clay, fluorite, gold, manganese, marble, 
mercury, platinum, saltpeter, silver, tin, and zinc. 

There are several opportunities in Persia for 
hydro-electric development on a large scale. Two 
such projects which have been under investigation, 
involve the damming of the Djajaroud Eiver near 
Teheran and the Karun Eiver near Shustar. 

The crown jewels constitute an interesting part 
of the national wealth of Persia. For the most 
part, they came into the possession of Persia at 
the conquest of India by Nadir Shah. A few 
years ago their value was appraised by foreign 



experts at forty million tomans. Acting on re- 
ports that the jewels were deteriorating, the 
Prime Minister personally inspected them on 
May 15, 1924. As reported to the Treasury- 
General by the Custodian of Royal Property : 

He found the jewels in special sealed boxes placed on 
boards erected in the vicinity of the Treasury where 
they have been well ventilated by hard iron windows 
opening both to the north and to the south. Neverthe- 
less, he instructed that the jewels be transferred to two 
of the upper store rooms known as Nasr-ed-Din Shah’s 
middle bed-room where the Prime Minister himself went 
and found it fit for the purpose, emphatically directing 
them to block up all the openings around the said two 
rooms and to furnish entrance doors with iron win- 
dows for them. 

We have already performed all the instructions per- 
taining to the strengthening of the two rooms which 
are now fit for our purpose. 

As the local papers and the Majless are saying much 
about these jewels, and moreover the damp weather of 
the Treasury may really damage the pearls which are 
the most important wealth of the country, I reported 
the case so that you may arrange to advise the authori- 
ties of the Ministry of Finance of the matter, and thus 
bring about means of transferring the jewels to a safer 

In its historical monuments and antiquities, 
Persia possesses a form of wealth that is of 
interest and value to the whole world. Unfor- 



tunately, many choice Persian antiquities have 
been exported from the country without much 
return to the Persian Government and may now 
be seen only in foreign museums. The impressive 
ruins of Persepolis and Susa, however, are sub- 
lime reminders of the past grandeur of Persia, 
and the part played by the country in the history 
of civilization. The French possess a concession 
for archaeological excavation in Persia ; and, 
according to the Persian press, it is in process of 
revision. In April, 1925, Professor Pope, of the 
Art Institute of Chicago, visited Persia. He de- 
livered lectures on Persian art before the public 
and officials of the Government, and, under his 
inspiration, a committee was organized to es- 
tablish a National Museum. 




T he work of the American Financial Mis- 
sion in Persia is now well under way. * 
Three years, tlie period of our associa- 
tion with the Persian problem, seem, in the 
shadows of Persepolis and Susa, a mere tick of 
the tireless clock of history. What Kismet has 
in store for the Persians, remains for the coming 
years to unfold; but, if in the heart of this 
Mohammedan people lurked the killing idea that 
fate had ages ago predetermined their destiny, 
how could wo account for their present visions of 
progress, their acceptance of change, their faith 
in those who advocate a new order, their hope 
in the future? There are, of course, reactionary 
elements in Persia, but they are far outnumbered 
by the progressives. Pessimistic observers have 
more than once written cynical epitaphs for the 
tomb of this ancient nation ; but Persia has refused 
to be buried, and has even perversely rejected the 
dictum of doctors that it had reached the final 
stages of decadence and death. A marvelous re- 
cuperative power possesses this ancient people 



and in that fact, as well as in their present mani- 
festations of sanity and common sense, lies their 
hope for the future. 

The American Mission has sometimes been com- 
pared to Hercules engaged in the task of cleaning 
the Augean stables, but no metaphor could be less 
apt. We are playing the part neither of Hercules 
nor of Sisyphus. The American Mission is not 
alone in its task. Before our arrival in Persia, 
the ground was prepared and the seed sown. We 
have had our passing disputes with officials and 
have met with opposition; but, as Muchir ed 
Dowleli remarked to me a few weeks ago, the 
American Mission has always had with it a vast 
majority of the influential Persians. 

The masses of the people are still largely in- 
articulate, but the political leaders whom they 
most willingly follow are those who stand for 
honesty, nationalism, and progress. The work of 
the American Mission, the extension of its life, 
and the enlargement of its membership constitute 
the best evidence of the present attitude of Per- 
sians toward reform and progress. The psy- 
chology of the Persian peoi)le, as I have tried to 
show, is favorable to progress; the Majless, the 
supreme power in the Government, is establishing 
itself as an efficient legislative organ; executive 
force and political leadership are in capable 
hands; foreign governments have unqualifiedly 



renounced any purposes of aggression or inter- 
ference in Persia. Stability and order exist in the 
country; Reza Khan Pahlevi’s task of cementing 
the nation is approaching completion; the grow- 
ing sentiment of patriotism gives vitality to the 
universal desire for constructive economic meas- 
ures, for education, and for sanitation. In my 
last conversation with him before I left Persia, 
the Prime Minister said: “You may tell to any 
one you see, that the situation of Persia is secure.” 

With the cooperation of the Persians, much has 
been accomplished in the finances. Revenues have 
been increased, expenditures controlled, and econ- 
omies effected; funds have been gradually di- 
verted to the items which contribute to economic 
development and public welfare ; the vicious circle 
of deficits and borrowings has been broken; a 
beginning has been made in the settlement and 
payment of claims ; the credit of the Government 
has improved; the corruption that attended pre- 
vious partizan and personal administrations has 
almost wholly vanished ; laws have been enforced ; 
the principles that budgets must be balanced and 
that a nation must increase its taxes to provide 
for its increased expenditures, have been given 
the formal stamp of parliamentary approval. 

If a miracle has occurred in Persia since the 
arrival of the American Mission, it has been per- 
formed by the Persians themselves, who have 



started, as wisely and as surely as any other 
government, to lay the financial foundation of 
their future economic structure. 

Much, however, still remains to be done. 
Budgetary procedure must be improved ; through 
new sources of revenue, such as the sugar-and- 
tea monopoly that has just been passed, a surplus 
must be created to permit transportation develop- 
ment, productive public works, the rehabilitation 
of agriculture, the restriction of the opium evil, 
and the repeal of archaic and vexatious taxes; 
famines and epidemics must be prevented; to 
accelerate the carrying out of the economic and 
social program, a loan should be obtained for 
which Persia can offer acceptable security. 

There are, of course, fairly obvious limits to 
the possibilities of economic development in 
Persia. The improvement of transportation 
facilities must first link the producing regions 
of the country with the consuming centers, and 
with the world ^s markets. Given transportation, 
Persian agriculture may be expected to expand 
to meet the needs of a larger population, as well 
as to contribute substantially to the export trade. 
Persian industry, remaining true to Persian ar- 
tistic traditions, can grow until it becomes a 
worthy handmaid of agriculture. With transpor- 
tation and the exhaustion of supplies abroad, 
Persia’s mineral resources should also come to 



their own. Already, apart from financial and 
allied measures, signs of better times are evident. 
Trade figures show a favorable trend; confidence 
is returning to the business community ; bank de- 
posits are increasing; the demand for more cur- 
rency taxes the capacity of the mint ; never before, 
perhaps, in the history of Persia were there so 
many pending applications for economic conces- 
sions. Of course, a country with the geograph- 
ical, topographical, and climatic situation of 
Persia can never hope to be a highly developed 
industrial or commercial country. Montana, 
Wyoming, Colorado, and Utah are rich and prom- 
ising regions, but their people have no aim, I 
suppose, to overtake economically New York, 
Pennsylvania, and Massachusetts. With the con- 
tinuance of satisfactory political conditions, 
Persia can reasonably look forward to economic 
conditions which, by the increase and the better 
distribution of wealth, will absorb the unemployed 
and the idle, raise the standard of living, univer- 
salize education, and provide a richer and more 
varied life for her people. More than this, 
Persians probably do not expect or desire. 

One of the most encouraging features of my 
association with the Persians is that they are 
one with me in recognizing that financial reor- 
ganization and economic development are not ends 



in themselves, but merely contributions to the pro- 
motion of the general welfare, which perhaps can 
be best defined as the greatest happiness of the 
greatest number. Whether a people caught in 
the elaborate mechanism of Western industrial 
civilization is really happier than one living a 
simpler life, is a question that probably can never 
be answeredi. It would be equally difficult to 
point out the features of our own civilization 
which are unquestioned contributions to happi- 
ness. Our nerve-specialists advise us to got back 
to the simple life and to take a rest ; a majority 
of the Americans and Europeans who have lived in 
Persia, are content to remain there, and seem to 
suffer little from the absence of what we are 
pleased to prize as modern conveniences and 

Many of the economic and financial slogans of 
the international booster become clieap and mean- 
ingless when tested in terms of real welfare ; and 
the recent introduction of an American brand of 
chewing-gum into Persia does not seem to have 
been an event to bo especially celebrated. The 
imitation of superficialities and the acquisition of 
extravagances are, assuredly, of little importance. 
It is clear that Persia should acquire as quickly 
as possible all those features of our civilization 
which insure against poverty, pain, and fear. On 



the other hand, it would be better for many of ns 
if we were to see and acquire the good in the life 
of other people. 

From the facts that I have set forth in this 
book, no one, I believe, will gainsay that the 
Persians are proceeding manfully to the solution 
of their problem. While certain European coun- 
tries have made excuses and floated loans, Persia, 
whose neutrality was violated, has assumed the 
burden of post-war reconstruction without repara- 
tions and, except for a few chaotic months after 
the war, without borrowing, and has also under- 
taken to settle the war claims of a foreign govern- 
ment. Through it all, her toman has risen in 
exchange value above the dollar and the pound. 
Unifying her people and maintaining order and 
security, she has voted additional taxes, equal to 
twenty-five per cent, of her present revenue, for 
the purpose of opening her territory to the in- 
dustry and civilization of the modern world. One 
of the opium-producing countries, she has offered, 
if given reasonable cooperation, to curtail the 
cultivation of opium. A people with such a record 
deserves at least to be permitted to work out un- 
hindered its own destiny. 

One hears the questions: “But how long will 
present conditions last in Persia? What will 
happen when Beza Khan Pahlevi drops his leader- 
ship and power?’^ To this there can be only one 



answer. No one can predict precisely what may 
happen, but this much may certainly be said : that, 
entirely apart from the person of any one leader, 
there are elements of stability and progress in 
Persia which have been growing stronger for a 
generation. Having produced leaders in the past, 
the Persian people may be expected to produce 
them in the future. Every nation depends on its 
leaders; and when a leader passes, there are al- 
ways dire predictions of disaster. Whatever may 
happen in the future, it is certain that Persia will 
need the forbearance and ssonpathetic assistance 
of foreign peoples more than criticism and com- 

While I am not responsible for the foreign 
policy of the Persian Government, and do not 
presume to advise any other government regard- 
ing its attitude toward Persia, it seems not im- 
proper to add to what I have already said on the 
international position of Persia, my views regard- 
ing the international measures which are most 
likely to assist the American Mission and Persian 
progressives in their task. If I read published 
diplomatic correspondence aright, adequate assur- 
ances have been given by foreign governments re- 
garding the territorial integrity of Persia and 
equality of economic opportunity in the country. 
Persia herself not merely gives lip-service to the 
principle of the open door, but desires to make 



the principle a practical reality by eliminating 
the discredited ideas of ^‘spheres of influence’’ 
and ‘^special interests,” and by establishing 
within her territory conditions under which for- 
eign capital may genuinely compete and be treated 
impartially. In a previous chapter, I have quoted 
fully, from published sources, official statements 
concerning the policies of Great Britain and 
Russia. With respect to the general policy of the 
United States Government, there is quoted below 
the paraphrase of an instruction sent by the 
Department of State to the American Legation at 
Teheran on January 21, 1922 : » 

You may inform the Persian Government that the 
Government of the United States is deeply interested in 
the Open Door and that it would insist upon this prin- 
ciple in its exchanges with the British* or any other 
Government. The American Government attaches the 
greatest importance to the preservation in Persia of such 
opportunity for American interests as is enjoyed by tho 
interests of any other nation. 

To this Muchir ed Dowleh, then Prime Minister, 
made reply on January 26, 1922, as follows: 

In thanking you for the communication which you 
were good enough to make to me, I seize this occasion 
to assure you that the Imperial Government which as 
always is attaching great importance to the mainte- 
nance of the principle of ‘‘open doors,” will do every- 
thing in its power for the maintenance of this principle, 



as well as for the development of the relations which 
exist between our two countries, and in this respect I 
count very much upon the precious assistance of the 
American Government.”^ 

Persia itself merits a fair opportunity, not so 
much for Persian capital abroad as for Persian 
aspirations at home. 

It is believed that if the facts of Persia were 
fully known, those foreign governments which now 
possess or assert a right to block her tax legisla- 
tion, to prevent a revision of her tariff, and, on 
one basis or another, to insist on special economic 
privileges against her will, would bo willing to 
recognize for her every fiscal and economic rigid 
possessed by other sovereign nations, upon re- 
ceiving from hed those guarantees — which, if I 
interpret her policy correctly, she has given and 
is still willing to give — of equality of economic 
opportunity to all who have interests in her 

In the first half of the nineteenth century, when 
our own nation was still young, the careers of 
Bolivar, Kosciusko, Kossuth, Garibaldi, and 
others evoked warm expressions of sympathy in 
the platforms of our parties and the resolutions 
of our Congress ; but those days have almost faded 
from our memories. Our present age is one per- 

1 Senate Document, 68 Congress, Ist. No. 97, p. 99. 



haps not of cynicism and indifference but cer- 
tainly of cold-blooded scientific administrative 
realism. Persia, however, as I have sought to 
show, is, according to the spirit of the age, solving 
a problem rather than fighting a battle. Her 
atmosphere is that of the bank rather than the 
opera. Her aims are expressed in the familiar 
terms of administration, economics, and finance. 
She makes no appeal to emotion. Nevertheless, 
viewed in a spirit of complete cold-bloodedness, 
her problem integrates into the world problem, 
the solution of which depends on stabilization 
through the perfecting of existing units of social 
organization, and through the creation of guaran- 
tees of free and frictionless economic circulation. 
There is, in my opinion, little hope for a contri- 
bution to the solution of the problem of Persia 
or of the world, in those old practices which were 
casual and inefficient — ^politico-economic penetra- 
tion, the tutelage of the weak by the strong, forced 
exploitation, and the agglomerating of empires. 



Abadan, 288 
Abbass, Shah, 6 
Afshar, Mirza Reza Khan, 36 
Aghdass, Sardar; see Moham- 
merah. Sheikh of 
Agriculture, 6, 248 
Alai, Mirza Hossein Khan, 19, 
90, 152, 235, 290 
American Presbyterian Mission, 

American School, Teheran, 91 
Amerie, Mirza Sultan Mo- 
hammed Khan, 36 
Amid ol Molk, 223 
Amnieh (Road Guards), 147 
Amol, 278 

Anglo-Persian Agreement of 
1919, 114 

Anglo-Persian Oil Company, 61, 
216, 270, 282, 287 
Anglo-Russian Agreement of 
1907, 113 
Aniline dyes, 285 
Aragh, 270 

Arhahi ( privately owned lands ) , 

Area, 0 

Armitage-Smith, Financial Ad- 
viser, 13, 28, 40, 81, 115 
Ashayer, Sardar, 229 
Askabad, 10 

Assad, Sardar, Minister of 
Posts and Telegraphs, 220, 
227, 238 
Astara, 295 

Auto-Iran Company, 273 
Aviation, 280 
Azadirhhdh, 143 

Azam, Sepahsalar, 186 
Azerbaidjan, Province of, 10, 
38, 44, 66, 64, 187, 244, 270, 

Baha ol Molk, Minister of Fi- 
nance, 172 

Bakhtiari, 126, 187, 227, 244 

Balfour, Earl of, 116 

Baluchi, 125 

Baluchi dialect, 127 

Bandar Abbass, 113, 266 

Bandar Jaz, 279 

Bank d’Escomptc dc Perse, 78 

Bank-Mran, 38, 203, 245 

Banks, 286 

Bast, 141 

Bayazet, 272 

Birjand, 113 

Bizot, Financial Adviser, 12, 40 
Bogart, E. B., Dr., 19, 38, 173 
Bojnourd, 243 

British-Russian Agreement of 
1907, 11 
Bushire, 266 

Calendar, 127, 162 
Camel, 272 
Carpets, 285 
Communism, 284 
Cotton, 262 
Courts, 136 
Crown jewels, 305 

Demavend, 9 

Discount Bank of Persia, 120 
Dizful, 272 
Djajaroud River, 305 


Djavad Khan, 28 
Djulfa, 121 

Dunaway, John A., 19, 38, 196, 

Duzdab, 10, 266 

Early, C. C., 19, 38, 173, 204 
Eghtedar, Amir, Minister of the 
Interior, 202, 227 
Elburz Mountains, 166, 303 
Emad os Saltaneh, 237 
Enzeli, 121 ; see also Pahlevi 
Estrabad, 243, 295 
Ettefagh, 143 
Exports, 282 

Ezz ol Memalek, Minister of 
Public Works, 202 

Fahim ol Molk, Minister of Fi- 
nance, 30, 47, 172 
Fare, Province of, 127, 217, 305 
Farzin, Mirza Mohamcd Ali 
Khan, 179, 209 
Fazlollah Khan, General, 233 
Ferouz, Prince, Minister of 
Foreign Affairs, 270 
Firouz Mirza, 183 
Fisheries, 8, 294 
Flannagan, James H., 19, 27, 
38, 151, 205 
Forests, 303 

Garrous, 251 
Gazik, 113 

General Accounting Law, 75 
Ghavam os Saltaneh, Prime 
Minister, 31, 172, 199 
Ghazian, 277 
Oheyam, 143 
Ghom, 270, 305 
Gilmore, Dr., 217 
Gore, Frank H., 19, 184, 194 
Guilan, 55, 262, 200 

Hall, Melvin, Major, 19, 38, 152, 
187, 275 

Hamadan, 121, 263, 270 
Hassan Kiadeh, 295 
Hydro-electric resources, 305 

Imbrie, Robert W., American 
Vice-Consul, 215, 221 
Imperial Bank of Persia, 41, 47, 
78, 184, 208, 212, 241, 286 
Imperial Ottoman Bank, 286 
Imports, 282 

Industrial development, 263 
“Iran,” newspaper, 31, 123 
Iron, 304 
Irrigation, 250 

Isfahan, 112, 189, 227, 259, 264, 

Jones, Edmund IL, 19, 38, 187 
Julfa, 266, 270 

Kakhk, 112 
Karasoo, 295 
Karun River, 269, 305 
Kasr-Chirin, 112, 260, 269 
Kazvin, 121, 270 
Kerman, 113, 217, 305 
Kermanshah, 270 
Khaikrosrow Shahrokh, Ar- 
bab, 133, 152, 235 
Khalisseh (public domain), 63 
Khanevari ( conscription-tax ) , 

Khanikin, 266, 276 
Khashgai, 125, 244 
Khaz’al, Sheikh; see Moham- 
merah, Sheikh of 
Khochtaria grants, 290 
Khoda Yar Khan, Minister of 
Posts and Telegraphs, 202 
Khoi, 270 
Khorammabad, 225 
Khorassan, 10, 38, 187, 244, 305 
Khozistan, 126, 216, 226, 238 
Kishm, 288 

Kuli Khan, Ali, Kabil ed 
Dowleh. 32 



Kurd, 125, 244, 274 

Kurdi dialect, 127 

Lead, 304 

Legislative procedure, 134 
Lijarki, 277 

Lionosoff concession, 205 
l^orcstaii, 217 
Lur, 225 
Luri dialect, 127 

MacCormack, D. W., Col., 10, 
38, 48, 173, 187, 102, 202, 216 
Maidan-i-Naplitun, 288 
Majless, organization, 131 ; pro- 
cedure, 135 
Maliatf 62 
Maraga, 274 
Marund, 274 

Mazandcran, Province of, 65, 
243, 262, 200, 304 
McCaskey, Charles I., 18, 38, 

Mcllioun^ 143 
Mcslied, 270, 205 
Mirzayantz, 153 
Mitchell, T. C., 10, 38, 48, 172, 

!Moa/zani, Sardar, 220, 242 
Moaz/ed os Saltaneh, Minister 
of dust ice, 202 

Modarres, First Vice-President 
of Majless, 145, 206 
Modir ol Molk, Minister of Fi- 
nance, 202 

Mohamed Ali Shah, 120, 230 
Mohammerah, 266 
Mohammerah, Sheikh of, 62, 
116, 126, 217, 226 
Moin ol Tojjar, 200 
Mokhber ed Dowleh, 70, 238 
Mokhber ed Dowleh Park, 26, 

Mokh1)er os Saltan eh. Minister 
of Public Works, 172 

Molitor, Camille, 70 
Molitor, Lambert, Adminis- 
trator-General of Customs, 

Mornard, Treasurer-General, 13, 

Mostowfi ol Memalck, Prime 
Minister, 172, 182, 235 
Motacham os Saltaiieh, 217 
Motamon ol Molk, President of 
Majless, 134, 152, 227 
Muchir ed Dowleh, Prime Min- 
ister, 17, 172, 102, 109, 235, 
300, 316 

Kadir Shah, 305 
iNaincs and titles, 167 
Nasr ed Din Shah, 270, 306 
Nasscry, Mirza Mahmoud Khan, 
24, 27 

Nassir ol Molk, Minister of Fi- 
nance, 24, 160, 172 
Naus, Director of Customs, 12 
Navaghcl, 08, 107 

Oil, 287 

Opium, tax on, 60, 188; cul- 
tivation of, 258 

Owyhaf (pious foundations), 66 

Pahlcvi, 122, 270, 205; see also 

Pahlevi, Reza Khan; see Reza 
Khan Pahlevi 
Peahlevi dialect, 127 
Pearson, Thomas, Captain, 19, 
27, 38, 151, 205 
Persian Railway Sjmdicate, 
Ltd., 276 
Pir Bazaar, 277 
I’ope, Professor, 307 
Population, 6 

Posht-i-Kouh, Vali of, 227 
Psychology, Persian, 84 
Punel, 277 



Railways, 8, 121, 266, 268, 273, 

Rainfall, 6 
Resht, 245, 270 

Reza Khan Pahlevi, Minister of 
War, Prime Minister, 36, 43, 
80, 98, 117, 126, 130, 132, 147, 
166, 172, 186, 188, 199, 220, 
239, 244, 310 
Roads, 269 
Rugs, 285 

Russo-Persian Bank, 286 
Russo-Pcrsian Commercial 
Agreement, 217, 268, 273, 296 
Ryan, Edward, W., Dr., 21, 173, 

Schools, 106 

Seistan, Province of, 64, 276 
Selki-Sar, 277 
Shahsevan, 126 
Sharif -Khaneh, 274 
Shiraz, 270 

Shumiatzky, Soviet Minister to 
Persia, 301 
Shustar, 276, 305 
Shuster, W. Morgan, Treasurer- 
General, 12, 27, 46, 69, 81, 
113, 186 
Silk, 262 

Sinclair Exploration Company, 
197, 207, 290 
Sodj-Bolag, 274 
Sofian, 121, 268, 274 
Solciman Mirza, Chairman of 
Budget Commission, 183; 
Minister of Public Instruc- 
tion, 202 

Standard Oil Company of New 
Jersey, 290 
Sturgeon, 294 
Sultan Ahmad Shah, 129 
Sultanabad, 263 

Tajaddud, 143 
Takamol, 143 
TaraghirkhCth, 143 
Tariff, 58 

Tchitcherin, George, 117, 123 
Tea, 263 

Teberani, Sheikh Mohammed 
Ali, 228 
Telegraph, 280 
Telephone, 281 
Tobacco, 262 
Tooleh, 277 
Torbat, 197 

Toumaniatz Frferes, 65, 197 
Transport routes, 269 
Treasury Gendarmerie, 46 
Trenton, 221 
Tunekal^un, 243 
Turki dialect, 127 
Turkoman, 125, 243 
Turkoman Chai, Treaty of, 68 
Turquoise, 305 

Urumiah, 55, 196, 251 
Urumiah Lake, 121, 268, 274, 

Valiahd (Crown Prince), 32, 

Vanitzoff concession, 295 

Weights and measures, 166 
Westdahl, General, Director of 
Police, 72 
Wireless, 281 
Women, position of, 145 

Yassai, Mirza Abdollah, 237 
Yezd, 112, 270 

Zadeh, Taghi, 152, 235 
Zia Din, Prime Minister, 44, 

Zoka ol Molk, 90 

Tabriz, 56, 121, 245, 264, 270 

1 18 35 

Title Uii-Lspaugh^ A.C. 

American task in Persia. 
Class N^15,5 ]t657a